Should the CEO of Countrywide be held personally responsible for some of the many billions of dollars losses of pension funds and other investors who bought Countrywide mortgage-backed securities (MBS)? The MBS’ value, over time, turned out to be a small fraction of what the investors had expected because of Countrywide’s allegedly reckless and/or fraudulent lending practices and underwriting standards. These investments were like homes built on quicksand, guaranteed to collapse, unsound from the start.
Should Mozilo face civil liability in Minnesota, fly-over country for Mozilo? His lawyers say NO and NO.
Many Americans express outrage at the absence of any criminal charges arising out of our economic turmoil against executives known to have caused or contributed to massive losses (Inside Job is a testament to these sentiments). Even civil liability may be elusive for what is widely seen as an almost monstrous degree of institutional wrong-doing. Do we have corporate-wide misconduct for which no corporate executive can ever be held responsible? It apparently takes a village to raise a child. Perhaps a corollary to this diffused concept of personal responsibility is that no one in particular is to blame for widespread corporate excesses and wrong-doing?