Countrywide's Mozilo charged with fraud, insider trading by SEC
Former Countrywide Financial CEO Angelo Mozilo has become the highest-profile executive to be accused of wrongdoing in the subprime mortgage meltdown. The Securities and Exchange Commission charged him with allegedly lying to investors and reaping $140 million in profits from illegal insider trading this afternoon.A civil lawsuit filed by the SEC alleges that Mozilo knew that increasingly lax mortgage underwriting standards at Countrywide, once a heavyweight in the subprime home loan industry, would endanger the company but failed to disclose the risk to investors.
"Countrywide portrayed itself as underwriting mainly prime quality mortgages using high underwriting standards," said SEC enforcement chief Robert Khuzami in a statement. "But concealed from shareholders was the true Countrywide, an increasingly reckless lender assuming greater and greater risk."
Two other Countrywide executives were also charged with securities fraud, according to the SEC.
The insider trading charges stem from pre-arranged stock sales Mozilo executed in 2007, the Associated Press reported. The SEC accused him of illegally using information not known to the public or investors to profit from the trades.
Mozilo's lawyer, David Siegel of Irell & Manella in Los Angeles, last month dismissed allegations of insider trading as "scandalous and inconsistent with even a cursory examination of the facts," according to Bloomberg News.
Once the biggest mortgage lender in the country, Countrywide was hit hard as more and more of the borrowers to whom it had given subprime loans fell behind on payments and defaulted in 2007. Badly damaged by losses, it sold itself to Bank of America (BAC) in early 2008.
D-Day for Harry Reid: Can he wrangle 60 votes for Senate health reform bill?
Fed stalls on Chinese bank deal, costs taxpayers $1.7 billion
Dell in a handbasket: Should founder Michael Dell resign?
Reader Comments (Page 1 of 3)
6-04-2009 @ 6:11PM
Peggy Marton said...
Boy doesn't he just look like a crook. Who would have known it.
Reply
6-04-2009 @ 9:37PM
SHUTUPDEMLIARS said...
ALL THE PEOPLE THAT HE SCREWED OVER KNOW IT NOW TO BAD THEY TRUSTED THIS S-- -- T BAG.
6-04-2009 @ 6:25PM
Mike Glen said...
Angelo Mozilo may be the first High level executive to be taken to civil court, but I doubt he will be the last. Considering Mozilo walked away from Countrywide with a major profit just before that house of cards crashed, leaves me with questions about his ethics. I would have the IRS audit him and his family and see what stinks when the can is opened. Then we start looking at , Freddie Mac, Fannie May, GM, Crysler and other C.E.O's whose companies crashed and burned but they got Golden Parachutes.
Reply
6-04-2009 @ 6:33PM
Cynthia S. said...
It's about time. He made so much money off of incident people even with good credit scores. He and his company and it's agents should all be investigated.
Reply
6-04-2009 @ 6:30PM
albert said...
WHAT WERE THE TIES TO SENATOR CHRIS DODD
WHO RECEIVED FREBEE MORTGAGE FROM COUNTRYWIDE----HANDCUFF DODD PUT HIM IN ORANGE JUMP SUIT AND POINT HIM TOWARDS LEVENWOTH
Reply
6-04-2009 @ 6:33PM
Rog said...
Think they are ever going to investigate Dodd an Franks??
How long have we been waiting for the House Ethics Com. investigation of Charlie Rangel?? And what about the congressman from down south caught in the sting a few years back with $90,000 in his freezer?? He is still serving in Congress..I guess he is working to get his nest feathered just in case they actually put him on trial. Our Congress, The Untouchables !!
Reply
6-04-2009 @ 6:48PM
Dave B said...
Why does everyone conveniently forget that the Congress nearly mandated subprime loans by banks, Fannie, Countrywide, etc--At the time, no one thought these loans were risky, as everyone felt real estate investments went up at least at the rate of inflation and down was not even considered a real possibility---That was the error in thinking that killed the golden goose for everyone who used their home equity like an ATM or overextended themselves and bought a bigger home than they could afford. The govt should investigate themselves (like Dodd and Frank) before they go on witch hunts. .
Reply
6-04-2009 @ 7:00PM
Richard said...
This is fine by me. However most of the public seems to know..(I HOPE) What role Barney, and Dodd strong armed the banks into making loans to the less fortunate among us to buy homes...that they clearly could not afford to begin with...Even with a second bailout! The few are subsidized my the many mostly already underwater that still are paying their mortgages..Ahh well, so much for redistributing the wealth...Another Welcome to the world of Socialism...as we see 14 new 'Czars' created by this administration and all of czars have absolute power and answerable to no one...As well as Banks, Auto. companies etc...Control and power...Ian Rand's 'Atlas Shrugged' alive and well
Reply
6-04-2009 @ 7:04PM
Scott V. said...
Of course not a sole will be charged with fraud from Freddie Mac or Fannie Mae since they are "government backed" but worse!!
Reply
6-04-2009 @ 9:36PM
SHUTUPDEMLIARS said...
FREE PASS FROM BARNEY FRANK. HELL BARNEY FRANK WILL SEND THIS SCUM BAG CARE PACKAGES EVERY WEEK .
6-04-2009 @ 7:17PM
dejeve said...
wasn't Obama going to look into all this nonsense? Wasn't h going to hold accountable all the villains that brought this mess down upon us? Where is he now? Where is the campaign trail caped crusader that would bring all the wrongs to right? Hmmmmm?
Reply
6-04-2009 @ 7:34PM
Wolfster said...
Don't forget to make the b@st@rd pay restitution...
Reply
6-04-2009 @ 7:44PM
Joanne Alexander said...
Well, it's about time. I agree with all of your posted comments. How many other criminals are out there lurking, living in luxury and looking down at us humble folk! I am angry about all the greed on wall street and in the govt.
We have toooooo much govt. Was'nt Obama gonna stop that? I think he is creating more govt!
I think he is nothing but another dirty politician!
Everyone needs to stop and look at what they have become!
Reply
6-04-2009 @ 7:47PM
Rich said...
I wonder if he'll be able to use a tanning salon in jail?
Reply
6-04-2009 @ 9:37PM
SHUTUPDEMLIARS said...
HE GET HBO AND CLEAN SHEETS STEAK FOR DINNER IF OBAMA HAS ANY THING TO DO WITH IT. HELL HE WILL BE INVITED TO THE WHITE HOUSE FOR THE 4TH OF JULY PARTY.
6-04-2009 @ 8:27PM
RON said...
it is about time the sec is doing something. i doubt though that even if this guy is found guilty he will spend much time in prison.
this kind of thing has been going on for years by top management and boards of directors. i remember in the 80's. the chairman of gm lead the company into a drop of more than 20% in market share. when he retired he was given a big bonus.
Reply
6-04-2009 @ 8:32PM
JAY said...
very little doubt this guy is a crook. I have done biz with CW in the past and the pay option ARMs were the least understood and most promoted (and misrepresented product of it's time). hate big gov but hate the excuse "it was legal at the time" even more. if the heads of big biz will not behave ethically or in the interest of the very company they manage what can we the people do????
Reply
6-04-2009 @ 8:49PM
jim said...
When are they going to arrest the real culprits.. Franks and Dodd?????
Reply
6-04-2009 @ 9:36PM
SHUTUPDEMLIARS said...
NOT AS LONG AS OBAMA IS IN OFFICE.
6-05-2009 @ 8:01AM
al said...
I mean, look at this frikkin' freak. Does he look like an honest man? Looks like he should be selling junkers out of some lemon orchard in guidoville.
Reply