« Question of the Day: Kids and Money | Main | Darn. Discover’s Closing My Account Due to Inactivity »
What Should Happen to Angelo Mozilo?
By JLP | June 5, 2009
The SEC has charged Angelo Mozillo with fraud. You can read the full complaint here (PDF).
The article seems pretty clear that Mozilo was aware of just how bad things were while he was dumping his company stock. Mozilo had always played the “I-don’t-know-how-this-could-have-happened” card. I remember reading in the Wall Street Journal (I can’t remember which article exactly) Mozilo saying something like, “No one could have seen this coming.”
Sure, pal.
Assuming that these charges hold up and Mozilo is convicted, what do you think should happen to him? What would be considered justice in your opinion?
I think he should be stripped of all his worldly possessions and wealth. If he were younger, I’d make him lay railroad tracks or fill potholes on America’s crumbling highways…lol.
Topics: Credit Crisis, Housing Market, Question of the Day | 3 Comments »
June 5th, 2009 at 6:04 pm
Nothing should happen to Mozilo. After reading the statement, the SEC is really just arguing word semantics in countrywide filings. The SEC is saying that they don't agree with the definition of 'prime loans' given in the Countrywide fillings. For those interested, Countrywide basically said Prime loans are any loans that meet GSE (Fannie Mae, etc) standards of being "conventional" — regardless of borrowers FICO score.
It really looks like the SEC complaint is saying that CountryWide did not do the job that the SEC was supposed to do: uncover and blatantly point out systemic risk.
Mazilo was a bad business man? Yes.
Is being a bad business man that same as fraud? No.
June 5th, 2009 at 6:07 pm
I tend to hold my opinion and let both sides argue their cases. We have only heard one side of the argument.
It is important to remember that the SEC cannot put someone in jail. They can only levy fines.
June 6th, 2009 at 3:19 am
I am sure Mazilo knew these were toxic loans, but you have to show that he intentionally de-frauded investors or the government. And, as LOL points out, these loans met the definition of the GSE prime loans. Maybe the government is partly to blame, and I think that is part of the reason the SEC is involved. They have so much egg on their face it is ridiculous. Now they need to crack some skulls, even if unjustified, to justify their existence.
I am a fee-only financial planner, and they are already lining up new regulations and hoops I have to jump through due to Madoff even though none of their ideas provide any real protection to the consumer. It just gives the appearance…kinda like taking your shoes off at the airport.