Fraud charge for Countrywide boss

Mr Mozilo founded Countrywide in 1969

Angelo Mozilo, former boss of US firm 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.

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.

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.

'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 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 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.