Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

PROSECUTORS CONSIDER CIVIL ACTION AGAINST COUNTRYWIDE FINANCIALS CHIEF EXECUTIVE

Author: Joel R. Glucksman

Date: November 24, 2014

Key Contacts

Back

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.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!

Please select a category(s) below: