Countrywide boss charged with fraud
The founder and former chief executive of America’s biggest mortgage lender has been charged with securities fraud and insider trading.
Angelo Mozilo, former head of Countrywide, is accused of deliberately misleading investors about the financial risks they were taking on.
US regulators also claim that Mozilo made nearly $140 million profit on his Countrywide stock by selling them based on non-public information.
Mozilo is accused by the Securities and Exchange Commission (SEC) alongside David Sambol, former chief operating officer, and Eric Sieracki, former chief financial officer.
All three intentionally misled investors by assuring them that Countrywide only lent to prime quality borrowers, the SEC said.
According to Robert Khuzami, director of SEC’s enforcement division, Mozilo “privately described one countrywide product as ‘toxic’ and said another’s performance was so uncertain that Countrywide was ‘flying blind’.”
Rosalind Tyson, director of SEC’s Los Angeles office, said Mozilo “knew that Countrywide was gambling with increasingly risky mortgages and he kept those details from investors while he was actively taking his own chips off the table.”
Mozilo now faces an FBI investigation that could lead to criminal charges and a jail sentence.
Category: Companies News, Insurance News
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