Daniel Mudd ended a five-year fight with the U.S. government Monday after the former head of Fannie Mae agreed to pay $100,000 to settle allegations that he misled investors about the mortgage backer's exposure to subprime loans during the run-up to the financial crisis.
The settlement ends one of the last efforts by regulators to hold individuals accountable for the shocks to the financial system after banks, ratings companies and others underplayed the risks of subprime mortgages. Three former Freddie Mac executives
The order, dated Aug. 11 and signed by U.S. District Judge Paul A. Crotty, said it was “not in the interest of justice to continue to litigate” against the former chief executive officer. The SEC had sought to ban Mudd from serving as an officer or director of a public company.
Calls for comment to Mudd, his attorneys and the SEC weren't immediately returned.
The SEC brought the case against Mudd and two other Fannie Mae executives in December 2011 amid calls from the public for more individuals to be held responsible for the financial crisis. The cases hinged in part on the definition of what constituted a subprime mortgage. The other two executives
In September 2008, the U.S. government took over mortgage giants Fannie Mae and Freddie Mac, putting them into a conservatorship and forcing out their top executives. The companies eventually received about $187.5 billion in bailout money, before becoming profitable again in 2012. Fannie Mae and Freddie Mac are still held in conservatorship as Congress dithers on whether the companies should survive or what could replace them.
Mudd, who currently runs Paladin Capital Group, led Fannie Mae from 2005 to 2008. He
