Countrywide CEO To Pay $67.5M In SEC Settlement
MARY LOUISE KELLY, Host:
Angelo Mozilo, a colorful former CEO of Countrywide, has settled civil fraud charges with the Securities and Exchange Commission. He does not have to admit guilt, but he does have to pay more that $67 million. As NPR's Tamara Keith reports, the settlement come just days before a jury trial was set to start.
TAMARA KEITH: Countrywide was once the nation's largest mortgage lender and became notorious for its risky subprime loans. Mozilo and two codefendants were accused of hiding problems with the firm's loan portfolio from investors. John Coffee is a professor at Columbia Law School where he specializes in securities law. He says the SEC has been an aggressive enforcer in this case.
JOHN COFFEE: They've negotiated a settlement which for an individual defendant is near a record penalty at $67.5 million.
KEITH: As part the settlement, Mozilo agrees that he will never again serve as an officer or director of a public company. In addition to the civil case, Mozilo faces a criminal investigation. It's unclear whether that case will ever result in charges, but Coffee says that had to help motivate Mozilo's attorneys to settle.
COFFEE: You can delay things up to the last minute, but eventually on the steps of the courthouse you've got to make a decision whether to try the case or settle. And I think he made the only rational decision for a potential criminal defendant in his position.
KEITH: Tamara Keith, NPR News, Washington.
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