Ok, so I admit, I do wonder about the “tan” and how Mozilo (not to be confused with Mozilla) was able to maintain it 365/24/7. But more important issues are front and center in his life right now.
Here’s the SEC press release on today’s announcement. (Can you imagine former SEC Chairman Christopher Cox taking such an action?)
Here’s the actual law suit.
Basically the SEC is going after Mozilo for assuring investors that they were a prime loan lender when they were actually pushing very high risk loans. In fact they were the #1 subprime lender.
>Former Countrywide Financial Corp. Chief Executive Officer Angelo Mozilo and two other people were accused of fraud by the U.S. Securities and Exchange Commission following an investigation of the firm’s role in the subprime mortgage crisis.
## “This is the tale of two companies,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Countrywide portrayed itself as underwriting mainly prime quality mortgages using high underwriting standards. But concealed from shareholders was the true Countrywide, an increasingly reckless lender assuming greater and greater risk. Angelo Mozilo privately described one Countrywide product as ‘toxic,’ and said another’s performance was so uncertain that Countrywide was ‘flying blind.'”
This has been brewing for a while.
He has a number of other cases as well, although Countrywide (BofA) is covering his legal expenses.
>Mozilo, a defendant in at least 115 other civil cases, already has in place a defense team from Irell & Manella (which is being paid by Countrywide and its insurers). Irell partner David Siegel issued a prepared statement on the SEC charges.
I am getting the feeling that there will be a number of other former executives with big paydays for dubious reasons that are going to get their own press releases. The SEC is trying to get it’s groove back.
>Carl W. Tobias, a law professor at University of Richmond, said he expected to see more such cases brought by the S.E.C. “The S.E.C. would like to have back the reputation that many feel it has lost as an aggressive enforcer,” Mr. Tobias said. “I wouldn’t be surprised to see other cases.”
I’m not advocating rampant litigation but the US can’t restore investor confidence if it doesn’t regulate and enforce laws on the books.
This is simply part of the de-leveraging process.
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Lawyers and lawsuits are maligned, but our democratic society would fail without them. Democracy must have transparency and civil lawsuits open closed doors when no one else does or can. The SEC (and the rest of the government) after 20+ years of de-regulation cum “don’t look, don’t see” has miles to go in recovering its purchase on credibility. I applaud the effort the SEC is making and I bet it won’t be long before Justice discovers the illegalities in Mozilo’s methods.
The guy has a flaw in his character big enough to house the Union Pacific. Mozilo amplified his willingness to victimize by the millions. There is a crime in there somewhere. After what he and his crew did to that company, its borrowers and its shareholders it is absolutely silly that Countrywide is paying anything for him or to him alone attorney’s fees incurred due to his fraud. This guy could charm the stink off a skunk.
Bravo for the investors, taxpayers and the country. The whole notion that they were doing business in a proper manner is bogus. There is no way that the loans were good to begin with. They voided all prudent procedure to put out all this paper. Investors would not have bought the loans if they knew how bad they were. At least I believe they could of made, an informed decision.