Angelo Mozilo, former head of Countrywide Mortgage, is rumored to be in the sights of the SEC. Charges of civil fraud are expected to be filed against Mozilo due to the timing of his stock sales before the significant drop in the mortgage market. All the while Mozilo was telling the marketplace everything was fine.

What is interesting is if the friends of Mozilo lending program he ran for politicians will come to light. The loans made to politicians such as Sen. Chris Dodd (D-CT), Kent Conrad (D-ND), Richard Holbrooke, and Donna Shalala we below market rate and clearing intent on helping Countrywide Mortgage get political favors.

Will this help Mozilo in his battle with the SEC? It will be an education to see how this plays out in the coming months. Mozilo has some dirt on some very important people in Washington just for this occurrence.

The SEC staff sent a Wells notice to Mozilo a few weeks ago informing him of possible charges, The Wall Street Journal reported online, citing unnamed people familiar with the investigation. The report said the charges include illegal insider trading and failing to disclose significant information to Countrywide shareholders.

In issuing Wells notices, the SEC enforcement staff customarily gives companies or individuals the chance to make the case why charges are unwarranted. That means a formal decision by SEC commissioners to file charges may not occur. via knoxnews.com

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