WASHINGTON — The Securities and Exchange Commission’s staff has recommended the filing of civil charges of fraud and illegal insider trading against Angelo Mozilo, co-founder and former chief executive of Countrywide Financial, a person familiar with the investigation said Wednesday.
Mozilo already faces private lawsuits accusing him of improperly selling his stock in the mortgage giant as its financial condition soured.
A decision on whether to bring civil charges of illegal insider trading and failure to disclose Countrywide’s troubles to shareholders must be made by the five SEC commissioners. Attorneys for Mozilo, who has denied wrongdoing, would have opportunities to try to persuade the commissioners not to file a lawsuit.
Calls to Mozilo’s home and the office of his attorney David Siegel were not immediately returned. John Heine, an SEC spokesman, declined to comment.
Countrywide, acquired last year by Bank of America, was the nation’s largest mortgage lender before surging defaults threatened to capsize it last year.
People close to the investigation previously told the Los Angeles Times that the probe was focused on whether Mozilo violated insider-trading law and misled investors about Countrywide’s finances.
Federal law bars corporate executives from buying or selling their companies’ shares while in possession of material nonpublic information about the company, unless the trades are made under plans established in advance.
