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Chief of failed US lender guilty of fraud

by Staff Reporter7 minute read

The former chief of Countrywide Financial – which succumbed to the sub-prime crisis last year – has been found guilty of fraud.

The US Securities and Exchange Commission (SEC) filed civil charges against Angelo Mozilo for misleading investors about the state of the company.

The SEC said the company concealed shareholder risk and portrayed itself as underwriting prime-quality mortgages while internally acknowledging it was writing increasingly risky loans, according to Dow Jones.

In email exchanges obtained by the SEC Mr Mozilo described one Countrywide product as “toxic” the SEC said, while another was deemed so uncertain it was “flying blind”.

Former chief operating officer David Sambol and former chief financial officer Eric Sieracki were also charged.

In addition to these charges Mr Mozilo was also charged with insider trading for selling his Countrywide stock for about $US140 million (A$174 million) in profit based on non-public information.

Bank of America took over the failed Countrywide in July last year.


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