Advertisement

Countrywide exec gets biggest SEC fine

U.S. federal regulators fined Countrywide head Angelo Mozilo $22.5 million -- the biggest penalty ever imposed on a senior executive of a public company. (UPI Photo/Roger L. Wollenberg)
U.S. federal regulators fined Countrywide head Angelo Mozilo $22.5 million -- the biggest penalty ever imposed on a senior executive of a public company. (UPI Photo/Roger L. Wollenberg) | License Photo

WASHINGTON, Oct. 15 (UPI) -- U.S. regulators fined former Countrywide head Angelo Mozilo $22.5 million -- the biggest penalty ever imposed on a senior executive of a public company.

The Securities and Exchange Commission also permanently barred the former Countrywide Financial chief executive officer from ever again serving on the board of a publicly traded company.

Advertisement

Mozilo and two other executives were accused of misleading investors as the subprime mortgage crisis developed. He was fined $22.5 million for misleading investors and also agreed to pay back $45 million in "ill-gotten gains" to settle SEC insider-trading charges, the SEC said.

Former Countrywide Chief Operating Officer David Sambol agreed to pay back $5 million and also was slapped with a $520,000 penalty and barred from public boards for three years. Former Chief Financial Officer Eric Sieracki agreed to pay a $130,000 penalty and was barred from practicing before the SEC for a year.

Robert Khuzami, SEC enforcement director, said the record penalty was fitting "for a corporate executive who deliberately disregarded his duties to investors by concealing what he saw from inside the executive suite -- a looming disaster in which Countrywide was buckling under the weight of increasing risky mortgage underwriting, mounting defaults and delinquencies, and a deteriorating business model."

Advertisement

Charges were filed against Mozilo, Sambol and Sieracki June 4, 2009. They were accused of failing to disclose to investors significant credit risks taken to build market share and misleading investors by assuring them their mortgage investments avoided the excesses of their competitors.

Mozilo also was accused of insider trading of securities based on non-public knowledge of Countrywide's increasing credit risk.

U.S. District Judge John F. Walter approved the settlement Friday at a California hearing. The defendants admitted no wrongdoing.

Latest Headlines

Advertisement

Trending Stories

Advertisement

Follow Us

Advertisement