Ex-Fortress Chief Resigned Instead Of Settling

Apr 12 2012 | 11:09am ET

Daniel Mudd could still be CEO of Fortress Investment Group today—but only if he did something he won't allow his lawyers to even mention.

The New York-based alternative investments giant's board of directors told Mudd they'd stick by him if he quickly settled a lawsuit against him by the Securities and Exchange Commission. In December, the regulator accused Mudd and five other former executives of Fannie Mae and Freddie Mac of making false and misleading statements about the firms' exposure to subprime mortgages.

But Mudd wouldn't budge, even if his controversial four-year stewardship of Fannie Mae has already "cost me two jobs."

"I've told my legal team: If you use the world 'settle,' I will fire you," Mudd told Bloomberg News.

"I've worked honestly and honorably and I'm not going to roll over in the face of a baseless, politically-motivated work of fiction."

Mudd resigned from Fortress in January, a month after the SEC lawsuit. Fortress was not accused of any wrongdoing.

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