It looks like it’s still possible that Orangelo Mozilo might still don an orange jumpsuit someday as Reuters reports that the SEC’s case against the founder of Countrywide Financial (gobbled up by Bank of America during the financial crisis) will soon go to trial.
In one of the highest profile enforcement actions to arise out of the recent financial collapse, the SEC accused Mozilo, former Countrywide President David Sambol and former Chief Financial Officer Eric Sieracki of failing to disclose the true state of Countrywide’s deteriorating mortgage portfolio.Regulators also contend Mozilo made millions by dumping Countrywide stock before the truth emerged.
Attorneys for the defendants have denied any wrongdoing, and argued in court filings that Countrywide was upfront about the risks of its mortgages.
But U.S. District Judge John Walter refused to resolve the case in Mozilo’s favor on Thursday, ruling that the SEC had raised enough factual issues for it to be decided by a jury, according to court documents.
The SEC presented evidence that Mozilo’s stock sales in 2006 and 2007 were “significantly out-of-line with his prior trading plans or practices,” Walter wrote. Thus a jury can decide whether Mozilo acted on inside information, Walter ruled, adding that Mozilo netted over $140 million from those transactions.
Anyone interested in some graphical representations of the orange man’s stock sales can visit Google Images to find a few charts created by yours truly a year or two ago when the sales were in progress. Also see, this search at the old blog for all kinds of ump lumpa related material, Angelo Mozilo is a Moron atop the list.