Johnny Caito 7:07 p.m., July 28
Mozilo Criminal Case Said Dropped
The brilliant Rolling Stone article by Matt Taibbi (see my post of Feb. 17, two posts down) has already proved prescient. Both the Los Angeles Times and New York Times are saying today (Feb. 19) that the criminal probe of Angelo R. Mozilo, former chief executive of Countrywide Financial, has been closed. The gist of Taibbi's article in the Feb. 16 Rolling Stone is that financial industry crooks essentially buy their way out of prison by paying fines that are a tiny fraction of their net worth. The Securities an Exchange Commission, Justice Department, and Wall Street lawyers are in on the scams. Here, in brief, is the Mozilo story: the Securities and Exchange Commission contended that he dumped $140 million of his Countrywide stock between 2006 and 2007 when he knew the company was failing. Emails had shown Mozilo saying that some of Countrywide's loans were "toxic" and "poison." But Countrywide kept selling such loans. Mozilo settled with the sEC for $67.5 million. Countrywide and Bank of America, which bought Countrywide, paid $45 million of the sum.
Writes Gretchen Morgenson of the New York Times, "The conclusion by prosecutors that Mr. Mozilo, 72, did not engage in criminal conduct while directing Countrywide wil likely fuel brad concerns that few high-level executives of financial companies are being held accountable for the actions that led to the financial crisis of 2008." Taibbi expresses the same sentiments in earthier words. San Diego's Gary Aguirre was quoted broadly in Taibbi's piece.