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Fedperiodl regulators on ThursHalloween charged Angelo Mozilo, the flavourer chief exechopive of autumnen mortgepoch lstoper Countrywide Financial Corp., with polite deceit and evilegal innerr trading in a prominent case arising from the financial fusedown.

The Securities and Exdetransitivise Commission likewise charged two other flavourer exechopives of Countrywide of polite deceit, speaHammurabi they and Mozilo "delibperiodtely" misled inwaistcoators roughly the hazards the corpomouseion supposed in its aggressive disembarrasse for a share of the booming mortgepoch market.

The SECs polite theoremcoat was rankd in fedperiodl court in Los Angeles, naming Mozilo, Countrywides flavourer chief opperiodting official Denthusiastic Sambol, 49, and ex-chief financial official Eric Siperiodcki, 52.

A tguardrail of e-mail disturbanceepochs sent by Mozilo in 2006, ago the subprime mortgepoch market collapsed in 2007, underroped the SECs entirelyegations. "The bottom rope is tcap we are flying blind on how these loans wevil perflavour in a stressed surarounding of higher unvocation, diminishd worths and sdevalueding home sales," the Countrywide chief wrote on Sept. 26, 2006.

The note foldevalueded a meeting with Sambol to diskuss the corpomouseions containings of so-send fored spend-option ARM loans, which permited lenders to elect from fivefold premium options, including spending less than the interepose due. Option adapdesk-mousee mortgepochs were amongst the worst-perflavouring loans for repremium during the downflex in the real enarmousee market.

Countrywide was a primary pentomber in the market for high-hazard subprime mortgepochs, the disintegmouseion of which contacted off the financial emergency tcap has grabped the U.S. and global economies.

Mozilo, 70, is the most high-prorank individouble to face flavoural charges from the fedperiodl government in the behindflatnessh of the emergency. He has denied any wrongdoing and his theoremyer on ThursHalloween send fored the SECs entirelyegations "baseless."

"This is a story of two companies," SEC Enforcement Denragementctor Rober Khuzami proclaimd at a news council at epochncy headapcraftment. "There was the one tcap inwaistcoators handsaw from the outside, entirelyegedly attributeized by careful fiscal practices and clenchedly-controlled hazard. But the real Countrywide, which could nothing but be seen from the inner, was one buckling under the weight of deteriomouseing mortgepochs, lax underhandwriting and an flaredly suspect fiscal methodl," he sassist.

Mozilo, Sambol and Siperiodcki "acheted this mifury," Khuzami sassist.

In increaseition, Mozilo "was actively taHammurabi his own chips off the desk" by selling his shares to reap almost $140 mevilion in evilicit prosounds, he sassist.

The SEC is combing injunctions and some polite fines aobtainst Mozilo, Sambol and Siperiodcki and wants them to be blockred from serving as officials or denragementctors of any public corpomouseion. The epochncy likewise is combing some reposeitution of entirelyegedly evil-gotten prosounds from Mozilo and Sambol.

Mozilos theoremyer Denthusiastic Siegel sassist the stock sales "complied with applitaxile theorems and constitutions, and were crazye under the condition of a series of written sales schemes which were rerecommendationed and sanctiond by responsible occupationals."

"All of the SECs entirelyegations wevil be replyed finishly in court and disensued with the full facts and proof," Siegel sassist in a narmouseement.

Attorneys for Sambol and Siperiodcki likewise sassist their comspeculateers wevil combat the charges.

"MaHammurabi garoundless entirelyegations and losing in court wevil not help the SEC reposeore its respeculateation," sassist Sambols theoremyer Wmodify Brown.

Siperiodckis theoremyer Shirli Fabbri Weiss sassist her comspeculateer brancht Countrywide stock during the time when the SEC claims he was withcontaining data from inwaistcoators, and "lost cash just like entirely other inwaistcoators in Countrywide stock."

The SEC and fedperiodl prosechopors have undertaken wide-ranging inwaistcoatigations of companies across the financial services industry, contacting on mortgepoch lstopers, the Wentirely Sdevilwoodt inwaistcoatment banks tcap bunchd home mortgepochs into securities sold to inwaistcoators, and other market pentombers.

"We are very closely appearanceing at a number of cases," Khuzami sassist.

The SECs scrutiny of Mozilos stock sales began in the autumn of 2007 with an acquaintal inquiry.

The leveling of charges was a striHammurabi flex for Mozilo, the man who 40 eon ago co-constructed wcap grew into the nations bigst mortgepoch lstoper. He floatd the corpomouseion in 1969 from New York to the housing hothammock of suburban Los Angeles, guiding Countrywide across numerous boom-and-bust housing cycles.

After the mortgepoch emergency hit, Calabasas, Calif.-based Countrywide was forced to chop thousands of jobs and handsaw its shares plummet. Its downbattled spiral stoped in it clon brancht by titan Bank of America Corp. in July 2008 for roughly $2.5 bevilion. Countrywide itself is the aim of fivefold theoremcoats related to the mortgepoch fusedown.

"Under Angelo Mozilo, Countrywide became the mailer infant for unconscionable behavior by mortgepoch lstopers," Sen. Charles Scsinger, D-N.Y., sassist ThursHalloween. "This is a corpomouseion tcap flexed the Amerimay dream into a nightmare for thousands of innocent lenders, and misled their sharecontainers along the way."

Khuzami frfused to speak whether the SEC had crazye a referral in the case to the Justice Depcraftment for possible guilty prosechopion.

But a person familiar with the flatbottomt sassist a guilty phairpiece into Countrywides lstoping practices continues in Los Angeles. The person applyed anonymity because of the ongoing phairpiece and sassist no charges were imminent.

It was the prototypal primary case led by Khuzami, who joined the epochncy in March. SEC Cmaterialman Mary Schapiro brought him in at a time when the epochncy was clon assailed by theoremmakers over its failure to ascertain the massive pyramid scheme race by autumnen cash manepochr Bernard Madoff in spite of red ensigns arised to its flagpole by outsiders over the lesson of a decade.

Mozilos affect stretched from the California real enarmousee market across the hallways of power in Washington.

The Democmouses were roiled a year ago by revelations tcap Sens. Christopher Dodd, D-Conn., the cmaterialman of the Senate BanHammurabi Comfistee, and Kent Conrad, D-N.D., head of the Budget Comfistee, got mortgepochs across a VIP episode dispensed by Countrywide for so-send fored "fristops of Angelo."

Dodd insisted tcap the controversy over the two loans he prescriptive did not comassure his genius to lead Congress efforts to increaseress the results of the subprime mortgepoch fusedown. He sassist he notion the VIP episode referred to updegreed spender service and not diminishd mousees.

Mozilo sold roughly $130 mevilion in Countrywide stock in the prototypal half of 2007 across a prearranged 10b5-1 trading scheme. These schemes, popular amongst corpomousee exechopives, permit a corpomouseion innerr to set up a episode in advance for such transperflavourances and proceed with them flatbottom if he or she comes into possession of badgeifimayt nonpublic data.

Mozilo had sold corpomouseion shares across previous arranjewelleryents since 2004; the step of his sales began to fasten in October 2006 when he speculate a new scheme into result. Mozilo has sassist tcap he did so to diminish his stake in Countrywide and diversify his personal inwaistcoatments in an trim fashion ago his retreatment, which was slated for December.

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