I’m really waiting to see who else will join Madoff with “Racketeering”?
By Edvard Pettersson – Sep 17, 2010 12:01 AM ET
Countrywide Financial Corp. former Chief Executive Officer Angelo Mozilo must face trial on regulators’ claims he misled investors about risks tied to subprime lending, a judge ruled.
U.S. District Judge John F. Walter in Los Angeles yesterday denied requests by Mozilo and two other former senior Countrywide executives, David Sambol and Eric Sieracki, for a ruling that there were no genuine issues to be tried. The case is now set for a jury trial in October.
“It remains to be seen whether the Securities and Exchange Commission will be able to convince a jury that defendants’ statements were indeed misleading and material,” Walter said in his decision. “At the summary judgment stage, the judge’s function is not himself to weigh the evidence and determine the truth of the matter.”
The SEC sued Mozilo, 71, in June 2009, saying he publicly reassured investors about the quality of Countrywide’s loans while he issued “dire” internal warnings and sold about $140 million of his own shares.
Mozilo is the most prominent executive targeted by U.S. regulators examining the subprime mortgage crisis. He co-founded Countrywide in 1969 and built it into the nation’s biggest mortgage lender, helping trigger the subprime bubble by offering loans to customers with below-average credit scores.
‘Flying Blind’
He wrote in an e-mail that Countrywide was “flying blind” and had “no way” to determine the risks of some adjustable- rate mortgages, according to the SEC complaint.
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