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|User Info||Angelo settles; entered at 2010-10-15 16:25:49|
LOS ANGELES — Countrywide Financial co-founder Angelo Mozilo and two other former executives have agreed to pay tens of millions of dollars to settle civil fraud and insider trading charges with federal regulators, lawyers said in federal court Friday.|
Mozilo and the others were to face trial on the charges next week.
Mozilo agreed to repay $45 million in ill-gotten profits and $22.5 million in civil penalties. Former Countrywide president David Sambol will repay $5 million in ill-gotten profits and $520,000 in civil penalties, and former chief financial officer Eric Sieracki will pay $130,000 in civil penalties.
Under the agreement, the three men did not admit wrongdoing.
The Securities and Exchange Commission accused the men of misleading shareholders about the quality of the loans on the Countrywide's books. The civil complaint also accused Mozilo of acting on his inside knowledge of the company's precarious state when he sold shares between November 2006 and October 2007 ahead of its collapse, reaping more than $139 million.
Mozilo was not in court when the settlement was announced.
The former Countrywide chairman is the nation's highest-profile defendant yet to face trial for risky business practices leading to the housing collapse that sent the country into recession.
In legal filings, regulators portrayed the three defendants as engaging in a single-minded pursuit of market dominance, even if it meant knowingly taking disastrous risks.
The company was a major player in the market for high-risk subprime mortgages and became the biggest U.S. mortgage lender overall before it spiraled into disaster when the mortgage meltdown hit. Bank of America bought Countrywide in 2008.
The settlement talks involving Mozilo were disclosed after U.S. District Judge John Walter filed a notice Thursday for trial lawyers to attend a status conference Friday.
Countrywide's lending practices are reportedly also the subject of a criminal probe in Los Angeles. U.S. attorney's office spokesman Thom Mrozek declined to comment about the situation.
Countrywide was based in Calabasas, Calif.