June 4, 2009
The Securities and Exchange Commission (SEC) is charging former Countrywide Financial CEO Angelo Mozilo and two other top executives with civil fraud.
A spokesman for the agency did not outline the charges in detail, but added that Mozilo faces additional charges of insider trading. Previously, SEC officials said they were considering charging Mozilo with misleading investors about the condition of the company.
Countrywide was the largest subprime mortgage lender in the country at the time the housing market collapsed. It has since been acquired by Bank of America, which has taken the firm out of the subprime market.
The 70-year-old Mozilo founded Countywide in 1969 and presided over its dominance in the mortgage industry. At the height of the housing bubble its commercials featured a soft-spoken pitchmen urging consumers to apply for low interest loans.
When homeowners began to default on their loans in large numbers in 2007, Countrywide stock began to slide. The SEC was said to be investigating how transparent Countrywide was in revealing the extent of those losses.
An attorney for Mozilo was not immediately available to comment to the media, but had earlier disputed the allegation that Mozilo had engaged in activity that would merit action against him by the SEC.
