To settle the Securities and Exchange Commission's (SEC) claims that Countrywide Financial management misled investors about the amount of credit risk the lender was taking on, former CEO Angelo Mozilo has agreed to pay a $22.5 million penalty. The amount is the largest financial penalty ever paid by a public company's senior executive in an SEC settlement.
The settlement also permanently bars Mozilo from ever serving as an officer or director of a publicly traded company and requires him to pay $45 million in disgorgement of ill-gotten gains to settle the SEC's disclosure violation and insider-trading charges.
Former Countrywide Chief Operating Officer David Sambol has agreed to a settlement in which he is liable for $5 million in disgorgement and a $520,000 penalty, and is barred for three years from holding an officer or director position. Former Chief Financial Officer Eric Sieracki agreed to pay a $130,000 penalty and a one-year bar from practicing before the SEC.
In settling the SEC's charges, the former executives neither admit nor deny the allegations against them.
The penalties and disgorgement paid by Sambol and Sieracki will also be returned to harmed investors.
SOURCE: Securities and Exchange Commission