SEC Drops Hammer on Mozilo (Update4)

Back in May, it was reported that Mozilo received a Wells notice from the SEC informing him of possible charges.

A Wells notice provides an opportunity for the accused to rebut the potential charges before formal charges are commenced.

Seigel rebutted the accusations then. "We do not believe there is any fair basis for allegations to be made against Mr. Mozilo," Siegel said in a statement that was e-mailed to The Associated Press and other news organizations.

"All of Mr. Mozilo's stock sales were made in compliance with properly prepared and approved trading plans, and reflected recommendations by his financial adviser over a long period of time," Siegel said in the statement.

"The persistent innuendo in the media and political circles that Mr. Mozilo was selling Countrywide stock because he was aware of some supposedly 'secret' adverse information about the company is scandalous and inconsistent with even a cursory examination of the facts surrounding the history of his stock holdings."

The SEC began investigating Mozilo in the fall of 2007. The North Carolina state treasurer, where Countrywide is home-based, asked the SEC to look into changes made in Mozilo's trading plans.

Mozilo is the most high-profile individual to face formal charges from the federal government in the aftermath of the crisis.

Countrywide was bought by Bank of America back in July 2008 for $2.5 billion after loan defaults and losses brought Countrywide to near collapse. Bank of America later renamed it Bank of America Home Loans. BAC shares were changing hands up 2% in morning trading.