Government to sue former Countrywide head

by Ryan Smith21 Aug 2014
After years of grumbling that the government has held few individuals accountable for the financial meltdown, it looks like Uncle Sam is taking a shot at one of the collapse’s chief architects.

A government task force plans to bring a civil suit against Angelo Mozilo, co-founder of Countrywide Financial Corp., according to a Bloomberg report. The government abandoned a criminal case against Mozilo three years ago, but now looks to sue Mozilo and up to 10 other Countrywide employees under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), Bloomberg reported.

Mozilo has already paid a $67.5 million penalty to the Securities and Exchange Commission, in a 2010 deal that didn’t require him to deny wrongdoing. Between 1999 and 2008, Mozilo made $535 million. The comparison between the SEC penalty and Mozilo’s net worth fueled criticism that the architects of the financial collapse were mostly untouched by the meltdown, according to Bloomberg.

Countrywide’s sales of shoddy mortgage-backed securities helped kickstart the crisis. Bank of America’s recent $17 billion settlement with the government revolved largely around toxic loans sold by Countrywide, which the bank acquired in 2008.

Mozilo, however, has been unapologetic, according to Bloomberg. In a 2011 deposition, the Countrywide co-founder said he had “no regrets” about how he ran the company, and claimed the financial meltdown was a “cataclysmic situation, unprecedented in the history of this country” that his company didn’t cause.
 

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