That’s It? Mozilo, Other Countrywide Execs Fined [UPDATED]

17Oct/103

That’s It? Mozilo, Other Countrywide Execs Fined [UPDATED]

Countrywide Financial Corp. 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 P. Sieracki will pay $130,000 in civil penalties.

Under the agreement, the three men did not admit wrongdoing.

Angelo R. Mozilo has pocketed $410 million in salary, bonuses and stock-option gains since he became executive chairman of mortgage lender Countrywide Financial in 1999, according to the executive compensation company Equilar.

Now, the man at the center of the national mortgage crisis stands to collect an additional $112 million in severance when Bank of America buys the company he helped found.

Equilar's numbers are based on Countrywide's most recent proxy statement, which is a year old. According to the statement, if Countrywide is acquired and Mozilo leaves, he is entitled to a cash severance of $88 million. He would also receive a retirement package worth $24 million.

Equilar said that most of Mozilo's compensation since becoming chairman -- $285 million -- has come from stock options. Mozilo has been criticized for selling pieces of his stake in Countrywide, cashing in tens of millions of dollars in options as the housing market dropped.

Mozilo's net worth is estimated at $600 million.

Remember all that talk about "clawback"? Notsomuch.

Here's the bill that Congress passed to try to protect these assholes:

Congress recently passed Bill H.R. 3808, the Interstate Recognition of Notarizations Act of 2010 which says anything a notary signs is true, is usable (like a driver’s license) in any state, and cannot be challenged. The banking industries may use this as an answer to litigation. However, the bill is now open for public comments at the white house.

To read the bill: http://bit.ly/b6ScNC

Anyone wishing to tell the president how they feel, may do so at the following link: http://bit.ly/aGMtOn

Obama vetoed it.

I'm not always in agreement with Rick Moran, but he's got this right.

There are no heroes in this story, only villains. And the only victim will be the taxpayers who may be asked to bail out the players in this mess using tax dollars.

If you think that might meet a little resistance in the new Congress, you are spot on. This is why some analysts are predicting something even worse: Congress simply ignoring property rights, the rule of law, and the sanctity of contracts to resolve the situation:

So here’s what I expect will happen. The lame duck session of Congress will pass a bill that essentially papers over the misdeeds of the banks that originated mortgage securities. Every member of Congress and every senator who has been voted out of office will cast a vote for the bill. And the president will sign it.

Will the public be outraged? Probably. Financial bloggers will scream from the high heavens against another bailout of the banksters. Congress may try to create some cost for banks in exchange for the forgiveness, perhaps requiring more mortgage modifications.

Yes, it would be outrageous — and expedient. In the name of quickly “solving” a problem of the banks own making, exacerbated by hundreds of thousands of homeowners abandoning personal responsibility, we could see Congress deal a blow to contract law and private property rights that would seriously undermine the rule of law in America and set a dangerous precedent for the future.

Sponsor:

Rep. Robert Aderholt [R-AL4]hide cosponsors
Cosponsors:
Bruce Braley [D-IA1]
Michael Castle [R-DE]
Artur Davis [D-AL7]

Passed by voice vote in the House. Passed by unanimous consent in the Senate.

Glad you're gone, Castle.

Okay, so this is another thing that Obama's done that I've agreed with, along with, um . . . equalizing penalties for possession of rock and powder cocaine.

Previously on POWIP.