SEC Charges Former Countrywide CEO Angelo Mozilo with Fraud

The Securites Exchange Commission (SEC) formally charged former Countrywide Financial CEO Angelo Mozilo and two other company executives with civil fraud.

The SEC also charged Mozilo with illegal insider trading, an agency spokesman said Thursday. Civil fraud charges also were filed against Countrywide's former Chief Operating Officer David Sambol and ex-Chief Financial Officer Eric Sieracki.

Countrywide Financial, the California-based mortgage lender, was a key component to the subprime mortgage crisis in 2007, which was the beginning of the financial decline and current recession in the U.S.

Mozilo is the most high-profile individual to face formal charges from the federal government in the aftermath of the crisis. He has denied any wrongdoing. His attorney did not immediately return an e-mail message by Associated Press for comment Thursday afternoon.

Mozilo co-founded Countrywide Financial and was at its helm as it became one of the country's most successful mortgage lenders. However, after the mortgage collapse, Countrywide was forced to cut thousands of jobs and their stock price plummeted. They were bought by Bank of America in 2007 for $2.5 billion.

Prior to the company's collapse, Mozilo sold $130 million in Countrywide shares in a pre-established 105b-1 trading plan, which allows a company insider to set up a program in advance for such transactions and proceed with them even if he or she comes into possession of significant nonpublic information.

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