Former Countrywide Financial chief executive Angelo Mozilo asked a federal judge in Los Angeles to dismiss the SEC’s fraud case against him. Request denied.
The judge also denied the dismissal motions of Countrywide’s former COO and CFO.
Reuters: Countrywide had been the largest U.S. mortgage lender before liquidity dried up in summer of 2007, leading to its acquisition the following year by Bank of America Corp for $2.5 billion.
Mozilo’s lawyer David Siegel called the court’s order “disappointing” but added he was confident Mozilo “will be vindicated once the complete record is presented to the court…”
“Angelo Mozilo is an innocent man who helped millions of people find a home for more than 40 years,” Siegel said in a statement….
The SEC sued the defendants in June, accusing them of misleading investors about the quality of Countrywide’s loans, including tens of billions of dollars of risky subprime and adjustable-rate mortgages.
The SEC is accusing the defendants of misleading investors about the quality of the company’s loans, including, of course, subprime mortgages. Mozilo also faces an insider trading charge.
The judge does not go easy on Mozillo and Co. “The specific allegations of the complaint relied on by the SEC describe in great detail the virtual abandonment of prudent underwriting guidelines and the resulting proliferation of poor quality loans, during the same period Countrywide was touting the superior quality of its underwriting guidelines and its loan portfolio,” the opinion says.
Click here for the entire Reuters article with more detail on the charges against Mozilo.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.