Lender’s ex-CEO must face fraud case
LOS ANGELES - Countrywide Financial Corp.’s former chief executive, Angelo Mozilo, must face a Securities and Exchange Commission lawsuit alleging he misled investors about the home lender’s deteriorating finances.
US District Judge John F. Walter, in an order filed yesterday, denied Mozilo’s request to dismiss the SEC’s securities fraud claims. He also rejected similar requests by former chief operating officer David Sambol and former chief financial officer Eric Sieracki.
The SEC sued Mozilo in June, saying he publicly reassured investors about the quality of Countrywide’s loans while he issued dire internal warnings and sold about $140 million of his own Countrywide shares.
He wrote in an e-mail that Countrywide was “flying blind’’ and had “no way’’ to determine the risks of some adjustable-rate mortgages, according to the SEC complaint.
Mozilo, 70, is the most prominent executive targeted by US regulators examining the subprime mortgage crisis.
He cofounded Countrywide in 1969 and built it into the nation’s biggest mortgage lender.
