Former Countrywide Financial Corp. Chief Executive Angelo Mozilo agreed to pay $67.5 million in financial penalties to settle the Securities and Exchange Commission’s high-profile civil fraud suit against him.
The two other defendants in the case, former Countrywide President David Sambol and former Chief Financial Officer Eric Sieracki, also reached settlements with the SEC. Mr. Sambol agreed to pay just over $5.5 million in penalties while Mr. Sieracki agreed to pay $130,000. All three defendants, who reached the settlements without admitting or denying wrongdoing, also agreed to injunctions against future violations of securities law.
Additionally, Mr. Mozilo agreed to a permanent ban on serving as an officer or a director of a public company, while Mr. Sambol agreed to a three-year ban.
Of Mr. Mozilo’s total, $22.5 million was in civil penalties and $45 million in disgorgement, or potential returns to investors. Of Mr. Sambol’s total, $5 million represented such repayments.
The settlements, whose likelihood was first reported in the Wall Street Journal on Thursday, came only days before the start of a jury trial in federal court here on the case.
In a suit filed last year, the SEC accused the three defendants of hiding from the public growing problems in Countrywide’s portfolio of risky loans. Those problems eventually led to the sale of Countrywide, once the nation’s biggest mortgage lender, to Bank of America Corp in 2008.