Countrywide's Mozilo to pay $67.5 million settlement

By Blake Ellis, staff reporter
October 15, 2010: 3:29 PM ET

NEW YORK (CNNMoney) -- Angelo Mozilo, the former co-founder of Countrywide Financial, has agreed to pay $67.5 million to the SEC to settle fraud charges.

The fine was one of the largest penalties ever issued for a corporate executive charged with filing false documents with the Securities and Exchange Commission.

The settlement was announced Friday at a status conference in the case before U.S. District Judge John Walter in Los Angeles, who called the settlement "fair and in the public interest."

Mozilo was slated to appear in the federal courthouse on Tuesday. But there were published reports in recent days that Mozilo and the SEC had been in confidential settlement negotiations.

Former Countrywide president David Sambol also settled and will pay fines totaling $5.25 million, while ex-CFO Eric Sieracki will pay a penalty of $525,000.

The three former executives were charged last year with defrauding investors by hiding the growing risks of the company's mortgages.

The defendants had previously denied the accusations, saying details about Countrywide loans were properly disclosed. In Friday's settlement, they did not admit or deny the charges.

David Sambol's attorney, Walter Brown, issued a statement defending his client.

"Bank of America will pay the entire disgorgement amount prescribed in the settlement on Mr. Sambol's behalf," Brown said. "While the agreement with the SEC prevents him from discussing the case, it makes clear that Mr. Sambol does not admit to any of the SEC's assertions."

Where are the subprime perp walks?

The SEC accused only Mozilo of insider trading, alleging that he sold millions of dollars worth of Countrywide stock after he knew the company was doomed.

Mozilo has long been the poster boy of the subprime mortgage meltdown. By settling the SEC charges early, the former Countrywide co-founder will avoid a trial that could have provided fodder for furture criminal charges.

Bank of America (BAC, Fortune 500), which acquired Countrywide in 2008 for $8 a share after the deteriorating quality of the mortgage lender's portfolio was realized, agreed in August to pay $600 million to settle similar charges.

The plaintiff lawyers on the case called the penalty the largest shareholder settlement since the mortgage meltdown started in 2007.

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