by Bill Singer
Shortly after the molten lava and ash from the eruption of the Great Recession fell upon us, on June 4, 2009, the Securities and Exchange Commission filed a Complaint in the United States Central District of California, against Countrywide Financial Corporation executives:
The Complaint charged the three defendants with securities fraud arising in connection with Countrywide’s highly publicized efforts to emerge from the pack as a leader among mortgage lenders. There was a lot of jockeying among those players in the mortgage biz — both those originating and those packaging and repackaging the debt — it was quite the club, with lots of elbows being thrown by the likes of Citibank, Wachovia, JP Morgan, Goldman Sachs,Fannie Mae, to name only a few.
Bill Singer
As it sought to emerge from the pack on the crowded mortgage biz track, Countrywide didn’t exactly come clean about the true nature of the credit risks inherent in its portfolio and many investors were the worse for that non-disclosure. The Complaint alleged that Mozilo, Sambol, and Sieracki knew that Countrywide was writing increasingly risky loans and that defaults and delinquencies would inevitably rise among loans that Countrywide serviced or had packaged and sold as mortgage-backed securities.
Following their settlements in October 2010 with the SEC, the three defendants paid the following civil penalty, disgorgement and prejudgment interest:
SIDE BAR: Mozilo received a credit of $25,000,000 for sums credited to him as part of his settlement in the class action In re Countrywide Financial Corporation Securities Litigation.
In addition to the financial penalties, Mozilo and Sambol consented to the entry of a final judgment that provided for a permanent injunction against violations of the federal securities antifraud laws. Mozilo also consented to the entry of a permanent officer and director bar, and Sambol consented to the entry of a three-year bar. Sieracki agreed to a permanent injunction from further violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act, and consented to a one-year bar from practicing before the SEC.
Payback
On July 12, 2012, a Plan of Allocation and the Plan of Distribution of the Fair Fund was approved, under which funds will be distributed to eligible claimants who submit valid proof of claim forms or who have already submitted proof of claim forms in the class action. If you believe that you are entitled to payment from the Fair Fund, contact:
Rust Consulting 1-877-225-9893,
Email: info@MoziloFairFund.com
Website: https://mozilofairfund.com