Countrywide Financial Corp. co-founder Angelo Mozilo has reached a settlement agreement with the Securities and Exchange Commission related to charges of insider trading and civil fraud, according to numerous sources.
Mozilo will reportedly pay $67.5 million in fines.
Mozilo, who started confidential settlement discussions with the SEC in the past few weeks, won't have to stand trial next week and stands little chance of facing criminal charges thanks to the settlement.
Countrywide was acquired by Bank of America Corp. (BAC) in 2008.
Mozilo -- along with two other defendants,former Countrywide president David Sambol and ex-CFO Eric Sieracki -- failed to disclose financial problems associated with Countrywide's risky loans and subprime mortgages to shareholders, according to the SEC. The regulatory agency also alleged that Mozilo conducted insider trading when he sold almost $140 million of Countrywide stock, according to the Journal. Mozilo was ordered to stand trial last month by U.S. District Judge John F. Walter.
Bank of America, which reiterated that all events related to SEC allegations occurred before the company's acquisition of Countrywide, said in a statement today that it was "pleased to see that the SEC and the defendants have reached a settlement," adding that its Countrywide unit will advance funds to Mozilo to pay non-penalty amounts ordered by the court.
Take the first steps to building your portfolio.View Course »