White Collar Crime Prof Blog

Civil Settlement for Players in Countrywide Case

The Securities Exchange Commission is reporting here that Former Countrywide CEO Angelo Mozilo will pay the SEC $22.5 million to settle SEC charges "that he and two other former Countrywide executives misled investors as the subprime mortgage crisis emerged. The settlement also permanently bars Mozilo from ever again serving as an officer or director of a publicly traded company."  The SEC notice also states:

"Former Countrywide chief operating officer David Sambol agreed to a settlement in which he is liable for $5 million in disgorgement and a $520,000 penalty, and a three-year officer and director bar. Former chief financial officer Eric Sieracki agreed to pay a $130,000 penalty and a one-year bar from practicing before the Commission. In settling the SEC’s charges, the former executives neither admit nor deny the allegations against them."

Some may ask - what about a criminal action?

1. Just because a civil case is proceeding with a resolution doesn’t mean that a criminal case might not be forthcoming. When the civil and criminal case are ongoing at the same time we call them parallel proceedings. But it doesn’t always mean that they have to start at the same time. In some instances, the criminal case will proceed after the civil has been ongoing for some time.

2.White collar criminal cases take a long time to investigate - they are document driven cases and as such require expertise that one doesn’t find when investigating a simple burglary or robbery case.

3. Civil cases have a different standard of proof - a much lower standard than criminal cases which require that prosecutors prove the case beyond a reasonable doubt. It is a more difficult burden and prosecutors need to assess whether they have accomplished what is needed with a civil enforcement action or if a criminal prosecution is needed. They also need to assess whether there is any criminal activity to warrant a criminal action.

4. The government needs to also determine if any conduct violates the law - or were the decisions that were made business decisions that may be wrong -- but ones that do not meet a level of criminality.

5.  Hopefully prosecutors will also consider how best to spend our tax dollars.

(esp)

Addendum, Gretchen Morgenson, NYTimes, How Countrywide Covered the Cracks 

Overcriminalization 2.0: Developing Consensus Solutions (October 21, 2010)

The Journal of Law, Economics & Policy at the George Mason University School of Law will host its annual symposium on October 21, 2010, in partnership with the Law & Economics Center at George Mason University, National Association of Criminal Defense Lawyers, and the Foundation for Criminal Justice.  There is widespread recognition, across the political and ideological spectrum, that the United States is over-criminalized, and that over-criminalization poses serious threats to our liberties, our values, and our prosperity.  With recognition and examination of this problem, it is now time to move to the next level – developing solutions. This symposium will capture the broad consensus on the over-criminalization problem and serve as the motivation for reform.

View the entire program here.

Some of the speakers confirmed for the symposium include:

Larry Thompson, General Counsel and Senior Vice President for Government Affiairs, PepsiCo, Inc.

Hon. Jed S. Rakoff, United States District Judge, Southern District of New York

Larry Ribstein, Mildred Van Voorhis Jones Chair and Associate Dean for Research, University of Illinois College of Law

Darryl Brown, O.M. Vicars Professor of Law and David H. Ibbeken ’71 Research Professor of Law, University of Virginia School of Law

Sara Sun Beale, Charles L. B. Lowndes Professor of Law, Duke University School of Law

Hon. Frederic Block, United States District Judge, Eastern District of New York

Hon. Cormac J. Carney, United States District Judge, Central District of California

Roger Fairfax, George Washington University Law School

Jim E. Lavine, Zimmermann, Lavine, Zimmermann & Sampson P.C., and President, National Association of Criminal Defense Lawyers

Cynthia Orr, Attorney, Goldstein, Goldstein & Hilley and Immediate Past President, National Association of Criminal Defense Lawyers

Solomon L. Wisenberg, Partner & Co-chair of the White Collar Crime Defense Group, Barnes & Thornburg, LLP

Lucian E. Dervan, Southern Ilinois University School of Law

Kate Stith, Lafayete S. Foster Professor of Law, Yale Law School

Lawrence S. Goldman, Law Office of Lawrence S. Goldman and Past President, National Association of Criminal Defense Lawyers

Hon. Nancy Gertner, United States District Judge, District of Massachusetts

Harvey Silverglate, Author and Of Counsel, Zalkind, Rodriguez, Lunt and Duncan, LLP

The full agenda and registration are now available.  The registration fee is $125 by October 1st, $175 after October 1st, and $30 for students.  5.0 Virginia CLE credits are approved.  We will also support you in submitting any CLE paperwork for your state bar association.

(esp)

In the News & Around the Blogosphere

Mike Koehler, FCPA Professor, ABB Ltd. Deferred Prosecution Agreement

 Kurt Anderson, law.com (AP), Ex-Rothstein COO Gets Maximum 10-Year Prison Sentence 

Leo Strupczewski, The Legal Intelligencer, law.com, Judge Who Pleaded Guilty in Pa. Corruption Scandal Reaches New Plea Deal (Note - this was a post-Skilling resolution)

Pat Forgey, Juneau Empire, Feds to drop charges against Clark  (Note- this was a post-Skilling resolution)

Chicago Tribune, (AP) Prosecutors oppose early release for George Ryan (Note- this is also related to the Skilling case)

(esp)