Mozilo Pays Millions

The lead article in today’s New York Times, “Lending Magnate Settles Charges for $67 Million,” provides just a touch of justice for those who suffered through the subprime crisis, many with homes foreclosed or other debilitating outcomes.

Angelo Mozilo, head of Countrywide, the mortgage company at the forefront of the crisis, was fined $67.5 million in a settlement with the S.E.C. However, he amassed hundreds of millions during his time as chief executive, and Countrywide is paying $20 million of the penalty.

The article estimates he earned more than $500 million between the year 2000 and the time he left the company in 2008. He also garned more than $100 million in stock trading in just one year, based on what many believe was insider trading.

The judgement does represent somewhat of a breakthrough, however, in that it is the first time an individual has been held responsible for the financial crisis that nearly toppled the civilized world. In fact, Mr. Mozilo was done in by his own words when he stated in a 2006 email that he had never seen a more “toxic” product than the one his company created by letting borrowers with poor credit purchase homes with no down payment.

In related court cases, Goldman Sachs had paid a penalty of more than $500 million, and former senior executives at Merrill Lynch face similar prosecution. Hopefully, the result of this case will have effects into the future rather than just the past.