CALABASAS, CA-The US Securities and Exchange Commission’s fraudcase against Angelo Mozilo, the former CEO of locally basedCountrywide Financial Corp., is heading to trial on Oct. 19 after afederal judge refused to dismiss the charges. US District JudgeJohn Walter in Los Angeles on Sept. 16 rejected motions filed byMozilo, the most prominent executive targeted by federal regulatorsover the subprime mortgage crisis, and two other defendants,Countrywide's former president David Sambol and former chieffinancial officer Eric Sieracki.
Walter said that the SEC had “raised genuine issues of materialfact” that Countrywide’s executives made false and misleadingstatements or omitted certain facts relating to its lendingpractices—in particular, expanding its underwriting guidelines andoffering riskier pay option loans, says the National LawJournal.
The SEC filed its complaint last year alleging that Countrywide andits executives failed to tell investors about the risky loans itwas giving out from 2005 to 2007 to borrowers with below-averagecredit histories. During 2006 and 2007, the suit says, as Mozilowas reassuring investors about Countrywide’s future, he sold $140million in his own stock.

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For the full story, go to theNational LawJournal.

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