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Angelo R. Mozilo To Pay Sec $67.5M Fine

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http://www.nytimes.com/2010/10/16/business/16countrywide.html?_r=1&ref=business

Angelo R. Mozilo, the former chief executive of Countrywide Financial, once the nation’s largest mortgage lender, agreed to pay $67.5 million on Friday to settle a civil fraud case brought by the Securities and Exchange Commission last year.

Countrywide itself is paying $20 million of Mr. Mozilo’s $67.5 million payment as part of an indemnification agreement he has with the company.

As part of the settlement, Mr. Mozilo, 71, also agreed to be permanently banned from serving as an officer or a director at any public company.

Federal authorities have been criticized for ineffectively policing Wall Street in the years leading up to the financial crisis and the settlement with Mr. Mozilo represents a significant milestone for the government.

Earlier this year, Goldman Sachs paid a $550 million fine to settle securities fraud charges. Securities regulators are also investigating former senior executives at Merrill Lynch for possible securities fraud.

While securities fraud cases are complex and often difficult to win, analysts have taken the government to task at times for not moving even more aggressively against Wall Street in the wake of the credit debacle.

Still, the settlement by Mr. Mozilo is the first time that a prominent executive has been penalized personally for financial excesses linked to a mortgage boom that, when it went bust, threatened to topple the economy and led to an unprecedented wave of foreclosures.

The deal came just four days before a jury trial was scheduled to begin in Los Angeles. David Sambol, the former president of Countrywide, and Eric Sieracki, the former chief financial officer, were also sued by the S.E.C. Both men settled their cases Friday as well; Mr. Sambol agreed to pay $5.52 million and Mr. Sieracki consented to $130,000. Mr. Sambol also is barred for three years from serving at a public company.

Mr. Mozilo’s agreement with the government is a humbling moment for one of the country’s most audacious and flamboyant financiers.

http://en.wikipedia.org/wiki/Angelo_Mozilo

Life and career

Mozilo was born in New York City, the son of a Bronx butcher. He received a Bachelor of Science degree from Fordham University in 1960. In 1969, he and his former mentor David S. Loeb, who had already started a mortgage lending company, founded Countrywide Credit Industries in New York. They later moved the headquarters to Pasadena, California and then to Calabasas, California in Los Angeles County. Mozilo and Loeb also cofounded IndyMac Bank, which was founded as Countrywide Mortgage Investment, before being spun off as an independent bank in 1997. IndyMac collapsed and was seized by federal regulators on July 11, 2008.[3]

Since Countrywide was listed on the NYSE in 1984, Mozilo has sold $406 million worth of its stock, mostly obtained through stock option grants. $129 million of this was realized in the 12 months ending August 2007.[4]

Perhaps more than any single individual, Mozilo has come to symbolize, and bear the blame for, the subprime mortgage crisis. In a New York Times feature on October 20, 2008, Henry G. Cisneros, former secretary of HUD and member of the Countrywide board of directors, describes Mr. Mozilo as “sick with stress — the final chapter of his life is the infamy that’s been brought on him, or that he brought on himself.” CNN named Mozilo as one of the "Ten Most Wanted: Culprits" of the 2008 financial collapse in the United States.[5]

[edit] Compensation

Mozilo's compensation during the United States housing bubble of 2001–06 has come under scrutiny. During that period, his total compensation (including salary, bonuses, options and restricted stock) approached $470 million.[6]

So in 5 years he made $470m and gets to pay a fine of 10% of that value.

Personally if I could earn that and brink the financial system to the brink and only have to pay a fine of $47.5m then I'd quite happily do it. This man should have had all his assets seized and been made bankrupt, there is no moral hazard for the rich.

The system is rigged one way.

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This settlement is a farce.

I by chance know one of Mozilo's defence attorneys -- quite possible the slimiest person I've ever met. I thought he'd been disbarred long ago, but I guess not.

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This settlement is a farce.

I by chance know one of Mozilo's defence attorneys -- quite possible the slimiest person I've ever met. I thought he'd been disbarred long ago, but I guess not.

It would appear defending the rich is an easy task.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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