Joel R. Glucksman
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PROSECUTORS CONSIDER CIVIL ACTION AGAINST COUNTRYWIDE FINANCIALS CHIEF EXECUTIVE
Author: Joel R. Glucksman
Date: November 24, 2014
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The business website DealBook reported on November 17 that the Justice Department is considering filing civil fraud claims against Countrywide Financials former chief executive Angelo Mozillo. Countrywide was one of the prime purveyors of mortgages to people with a questionable credit history, and the federal prosecutors are alleged to be considering a lawsuit against Mozillo due to his role in Countrywide’s marketing of mortgages.
According to the DealBook article, Mozillo’s lawyers argue that such a lawsuit would merely duplicate the Securities and Exchange Commission’s prior action, which resulted in a settlement with Mozillo and other defendants requiring the payment of $67.5 million in fines and restitution. They claim that it would be unjust for two government agencies to bring similar actions several years apart.
The DealBook article quotes Columbia University professor of criminal law Daniel Richman as saying that, “settling with the S.E.C. in and of itself doesn’t necessarily guarantee peace from the government at large.” Richman also notes that Mozillo could have asked for a global settlement when he made his deal with the S.E.C. but apparently did not.
Mozillo was the public face for the excesses which led to the mortgage market meltdown, and there is persistent, public anger over the absence of any criminal prosecutions for persons responsible for the financial crisis. However, federal prosecutors around the country have used the law to obtain over $36 billion in settlements from the financial firms involved in selling defective, mortgage-backed securities.
Whether or not to sue Mozillo will require a final decision by the Justice Department in Washington, and it could become one of the first orders of business for the proposed new Attorney General Loretta Lynch.
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PROSECUTORS CONSIDER CIVIL ACTION AGAINST COUNTRYWIDE FINANCIALS CHIEF EXECUTIVE
Author: Joel R. Glucksman
The business website DealBook reported on November 17 that the Justice Department is considering filing civil fraud claims against Countrywide Financials former chief executive Angelo Mozillo. Countrywide was one of the prime purveyors of mortgages to people with a questionable credit history, and the federal prosecutors are alleged to be considering a lawsuit against Mozillo due to his role in Countrywide’s marketing of mortgages.
According to the DealBook article, Mozillo’s lawyers argue that such a lawsuit would merely duplicate the Securities and Exchange Commission’s prior action, which resulted in a settlement with Mozillo and other defendants requiring the payment of $67.5 million in fines and restitution. They claim that it would be unjust for two government agencies to bring similar actions several years apart.
The DealBook article quotes Columbia University professor of criminal law Daniel Richman as saying that, “settling with the S.E.C. in and of itself doesn’t necessarily guarantee peace from the government at large.” Richman also notes that Mozillo could have asked for a global settlement when he made his deal with the S.E.C. but apparently did not.
Mozillo was the public face for the excesses which led to the mortgage market meltdown, and there is persistent, public anger over the absence of any criminal prosecutions for persons responsible for the financial crisis. However, federal prosecutors around the country have used the law to obtain over $36 billion in settlements from the financial firms involved in selling defective, mortgage-backed securities.
Whether or not to sue Mozillo will require a final decision by the Justice Department in Washington, and it could become one of the first orders of business for the proposed new Attorney General Loretta Lynch.