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| Version 1 | Version 2 |
|---|---|
| Fraud charge for Countrywide boss | Fraud charge for Countrywide boss |
| (about 1 hour later) | |
| Angelo Mozilo, former boss of Countrywide Financial, has been charged with civil fraud and insider trading by the Securities and Exchange Commission. | Angelo Mozilo, former boss of Countrywide Financial, has been charged with civil fraud and insider trading by the Securities and Exchange Commission. |
| He is the highest profile executive to face charges relating to the US sub-prime mortgage crisis in 2007. | He is the highest profile executive to face charges relating to the US sub-prime mortgage crisis in 2007. |
| Bank of America eventually rescued the biggest US mortgage lender, buying it for $2.5bn (£1.5bn) in July 2008. | Bank of America eventually rescued the biggest US mortgage lender, buying it for $2.5bn (£1.5bn) in July 2008. |
| Mr Mozilo has denied doing anything wrong. Two other former executives have also been charged with civil fraud. | Mr Mozilo has denied doing anything wrong. Two other former executives have also been charged with civil fraud. |
| Former chief operating officer David Sambol and former chief financial officer Eric Sieracki "misled the market by falsely assuring investors that Countrywide was a prime quality mortgage lender that had avoided the excesses of its competitors", the SEC alleged. | |
| It added that Mr Mozilo had deliberately misled investors about the credit risks that the company was taking. | It added that Mr Mozilo had deliberately misled investors about the credit risks that the company was taking. |
| 'Flying blind' | 'Flying blind' |
| The SEC also said that he had made nearly $140m in profit from selling his Countrywide shares "based on non-public information". | The SEC also said that he had made nearly $140m in profit from selling his Countrywide shares "based on non-public information". |
| The sub-prime crisis, which was caused by mortgages being given to people who could not really afford them. | The sub-prime crisis, which was caused by mortgages being given to people who could not really afford them. |
| The loans were then repackaged by banks and sold on to investors, made to look like low-risk investments. | The loans were then repackaged by banks and sold on to investors, made to look like low-risk investments. |
| The SEC published extracts from e-mails sent by Mr Mozilo. | The SEC published extracts from e-mails sent by Mr Mozilo. |
| "The bottom line is that we are flying blind on how these loans will perform in a stressed environment of higher unemployment, reduced values and slowing home sales," he wrote on 26 September 2006. | "The bottom line is that we are flying blind on how these loans will perform in a stressed environment of higher unemployment, reduced values and slowing home sales," he wrote on 26 September 2006. |