Mozilo Gets Off Easy
Angelo Mozilo, former CEO of CountryWide Financial was fined $67.5 million to settle charges of insider trading and civil fraud. Of this, $45 million or 66% will be paid by Bank of America, who acquired the toxic asset and must now indemnify the former head. As I mentioned back in early 2007, CountryWide insiders were dumping stock as fast as they while simultaneously publicly pumping it. Mozillo made about $134 million from insider trading and then another $100 million on the sale of the company to Bank of America. Having profited over $200 million, being fined a mere $22.5 million doesn’t seem like much of a punishment.
Of course, being a CEO of a major US financial institution seems to provide immunity against any wrongdoing. Now and then, the SEC will prosecute someone to make an example of them, but the most part you can get away with far more than the average white collar criminal.
Meanwhile, Bank of America’s stock has been whacked this year, down 20% year to date. If Bank of America really did buy Countrywide for the tax losses, this investment just got better!
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