Ocwen Financial Corp. will pay $2 million to settle charges that it misstated its financial results in valuing complex mortgage assets, the Securities and Exchange Commission said this week.

The SEC launched an investigation against Ocwen last year, alleging the Atlanta mortgage servicer misled investors by claiming it had independently valued certain mortgage assets, said Michael Osnato, chief of the SEC enforcement division's complex financial instruments unit.

Ocwen had instead relied on a related third-party for valuing the assets, Osnato said in a statement. The third-party's methodology deviated from fair-value measures and later was proved to be flawed, the SEC found.

As a result, Ocwen misstated its net income over four quarters, from the last three quarters of 2013 to the first quarter of 2014, Osnato said.

The SEC's investigation also found that Ocwen failed to prevent conflicts of interest involving the company's former executive chairman, William Erbey, who played a dual role in many related party transactions. New York regulators forced Erbey, Ocwen's founder, to step down as part of a $150 million settlement.

Erbey was required to recuse himself from transactions with related companies in which he also held leadership roles. But Ocwen had no written policies or procedures on recusals, and the practice was basically inconsistent and ad hoc. Erbey was able to approve a $75 million bridge loan to Ocwen from a related company, where he also served as chairman, the SEC found.

"Ocwen's filings led investors to believe the company was valuing complex mortgage assets using [generally accepted accounting principles] rather than relying on a related company's accounting methodology," Osnato said in a statement. "Ocwen released inaccurate financial statements because its internal controls were inadequate and its audit committee failed to scrutinize whether the methodology was an appropriate way to measure fair value."

Ocwen said it was pleased to resolve the SEC investigation.

"Ocwen remains committed to full compliance with all legal and regulatory requirements and will continue to fully cooperate with regulators on any matter brought to its attention."

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