Countrywide, once the nation's largest home mortgage lender, was blamed by many for its role in the subprime mortgage meltdown that kicked off the ongoing financial crisis. The company collapsed last year and was acquired by Bank of America. Mozilo, who co-founded the company, became synonymous with predatory lending as many Americans fell into foreclosures after they took out risky loans through Countrywide and other lenders that they were unable to afford.
The Securities & Exchange Commission announced today it will charge former Countrywide CEO Angelo Mozilo and two others with civil fraud and insider trading, making Mozilo the most high-profile individual to face federal charges in the wake of the financial crisis.
Countrywide, once the nation's largest home mortgage lender, was blamed by many for its role in the subprime mortgage meltdown that kicked off the ongoing financial crisis. The company collapsed last year and was acquired by Bank of America.
Countrywide, once the nation's largest home mortgage lender, was blamed by many for its role in the subprime mortgage meltdown that kicked off the ongoing financial crisis. The company collapsed last year and was acquired by Bank of America.
Mozilo, who co-founded the company, became synonymous with predatory lending as many Americans fell into foreclosures after they took out risky loans through Countrywide and other lenders that they were unable to afford. Mozilo is accused of selling his Countrywide stock based on insider information for nearly $140 million in profits.
"This is the tale of two companies," Robert Khuzami, Director of the SEC's Division of Enforcement said at a press conference announcing the charges. "Countrywide portrayed itself as underwriting mainly prime quality mortgages using high underwriting standards. But concealed from shareholders was the true Countrywide, an increasingly reckless lender assuming greater and greater risk. Angelo Mozilo privately described one Countrywide product as 'toxic,' and said another's performance was so uncertain that Countrywide was 'flying blind,'" Khuzami said.
Mozilo is accused of selling his Countrywide stock based on insider information for nearly $140 million in profits.
"This is the tale of two companies," Robert Khuzami, Director of the SEC's Division of Enforcement said at a press conference announcing the charges.
"Countrywide portrayed itself as underwriting mainly prime quality mortgages using high underwriting standards. But concealed from shareholders was the true Countrywide, an increasingly reckless lender assuming greater and greater risk. Angelo Mozilo privately described one Countrywide product as 'toxic,' and said another's performance was so uncertain that Countrywide was 'flying blind,'" Khuzami said.
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