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 profits and pay $520,000 in civil penalties, and former Chief Financial Officer Eric P. Sieracki will pay $130,000 in civil penalties.This is not to say these guys are on the hook for the money:
Sambol's attorney Walter Brown said in a statement after the hearing that Bank of America Corp., which bought Countrywide in July 2008, would pay his client's $5 million in ill-gotten profits.Oh, and speaking of BofA:
The payment comes on top of $600 million that Bank of America agreed to pay in August to end a class-action case filed by former shareholders against Countrywide.If I were a BofA shareholder, I'd want to ask its board of directors and CEO why BofA acquired Countrywide.
Mozilo lawyer David Siegel did not return a message asking whether the former countrywide chairman's $45 million forfeiture would also be paid by the bank.
The SEC charges related only to the harm allegedly done to shareholders. Presumably the harm allegedly done to homeowners is to be covered by a still-pending criminal probe.
I know settling cases is supposed to get more bang for the buck than taking them to trial -- lower expenses, no risk of exoneration by a jury -- but I hope the Feds don't settle a criminal case against these guys, if they find that one exists. I can't imagine that shareholders' harm can compare with that suffered by homeowners facing foreclosure. A trial might finally answer the question of whether those homeowners were deceived by criminally dishonest lenders, or walked into those dippy loans ("interest-only mortgages"? Really?) with open eyes and empty heads.
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