Banking: Countrywide CEO Mozilo to pay record sum, banned for life
Angelo Mozilo will never again serve as an officer or director of a public company in the USA afterhe settled an action by the USA's SEC: he will pay a record penalty, surrender "ill-gotten gains" and agree to a banning order. Mozilo was CEO of failed Countrywide Financial.
Despite the fact that this is a negotiated settlement, the SEC's press release carries an undercurrent of ire. In settling the SEC's charges, the former executives neither admit nor deny the allegations against them.
Mozilo will settle "SEC charges that he and two other former Countrywide executives misled investors as the subprime mortgage crisis emerged."
Mozilo’s financial penalty, USD22.5 million, is the largest ever paid by a public company's senior executive in an SEC settlement. Mozilo also agreed to USD45 million in "disgorgement of ill-gotten gains" to settle the SEC’s disclosure violation and insider trading charges against him, for a total financial settlement of USD67.5 million" that will be returned to harmed investors" according to the SEC.
Former Countrywide chief operating officer David Sambol agreed to a settlement in which he is liable for USD5 million in surrendered profits and a USD520,000 penalty, and a three-year officer and director bar. Former chief financial officer Eric Sieracki agreed to pay a USD130,000 penalty and a one-year bar from practising before the Commission.
The penalties and surrendered profits paid by Sambol and Sieracki "will also be returned to harmed investors."
Download PDF version of this page