Facts

Defendant Angelo Mozilo was CEO of Countrywide Financial Corp. from 2005 until 2007, and co-founded the company in 1969. In 2008, Countrywide was sold to Bank of America Corp. The U.S. Securities and Exchange Commission (SEC) filed suit against Mozilo, as well as officers David Sambol and Eric Sieracki, alleging they misled investors, profiting from the sale of shares at inflated prices.

PLAINTIFF'S CONTENTIONS:
The SEC contended that Mozilo publicly reassured investors regarding the quality of Countrywide's loans, knowing that the company's underwriting guidelines were deteriorating since 2005. The SEC further alleged Mozilo knew Countrywide was issuing an increasing number of risky subprime loans.

Result

The parties reached a settlement totaling $73.15 million. Mozilo settled for $22.5 in civil penalties and $45 million in disgorgement. Sambol settled for $520,000 in civil penalties and $5 million in disgorgement. Sieracki settled for $130,000 in civil penalties. All disgorgement amounts are being paid by Countrywide Financial Corp. Under the settlement, defendants neither admitted nor denied any wrongdoing.