Criminal proceedings against Mozilo will be dropped
Daylife/Reuters Pictures used by permission
Federal prosecutors in Los Angeles have dropped their criminal investigation into Angelo R. Mozilo, the former chief executive of Countrywide Financial, once the nation’s largest mortgage lender…
The closure of the case after two years of inquiry follows last October’s settlement by Mr. Mozilo of insider trading allegations made by the Securities and Exchange Commission. Regulators had contended that Mr. Mozilo sold $140 million in Countrywide stock between 2006 and 2007 even as he recognized that his company was faltering. Countrywide and Bank of America paid $45 million of Mr. Mozilo’s $67.5 million settlement, and he was responsible for the rest.
Without admitting or denying wrongdoing, Mr. Mozilo agreed to be banned from serving as an officer or a director of a public company.
The conclusion by prosecutors that Mr. Mozilo, 72, did not engage in criminal conduct while directing Countrywide will likely fuel broad concerns that few high-level executives of financial companies are being held accountable for the actions that led to the financial crisis of 2008.
Hundreds of billions of dollars have been lost by investors while millions of borrowers have lost their homes. Few of the people who ran the institutions that contributed to the disaster have been found liable…
Even as criminal and civil prosecutors are closing investigations into financial executives, private litigation is swelling. Investors who purchased dubious mortgage securities are bringing a wide array of cases against mortgage lenders and the Wall Street firms that enabled them. These investors maintain, citing internal documents and e-mails, that those putting together mortgage securities knew that they contained problematic loans that would likely fail…
In his years at Countrywide, Mr. Mozilo became one of the highest-paid executives in America. From 2000 until 2008, when he left, Mr. Mozilo received total compensation of $521.5 million…
Mozilo received a pat on the butt and wall-to-wall money from Bank of America on his departure. A historically criminal act even if the Department of Justice and the SEC feel successful prosecution at this time is unlikely. The operative phrase being “at this time”.
As civil cases proceed, the Feds retain the right to acquire information from those lawsuits to predicate future criminal prosecution against this creep. Still, it’s a sad day when the attitudes, premises and culture of American jurisprudence continues to bend over backwards to avoid criminal proceedings against the greedy bastards who brought down this economic house of cards.
