The former CEO of Countrywide Financial Corp. is asking for the dismissal of the federal government's civil-fraud case against him, citing distorted evidence and the omission of company disclosures, according to a published report.
The Wall Street Journal reported Saturday that attorneys for Angelo Mozilo filed the motion to dismiss the Securities and Exchange Commission's case in federal court in Los Angeles.
In the filing, Mozilo's attorneys say the alleged inaccuracies and omissions undermine the SEC's case against their client. Related motions for dismissal were filed by the two other defendants in the case, former Countrywide President David Sambol and former Chief Financial Officer Eric Sieracki, according the Journal.
A representative for the U.S. Attorney's office in Los Angeles wasn't immediately available for comment.
The executives were charged in June with civil fraud for allegedly deceiving shareholders and profiting from confidential information.
The SEC is seeking injunctions and unspecified civil fines against Mozilo, Sambol and Sieracki, and wants them to be barred from serving as officers or directors of any public company. The agency says the executives deliberately misled investors about the risky lending practices the company undertook in its aggressive drive for a share of the booming mortgage market.
The agency's allegations are underlined by a trail of e-mail messages sent by Mozilo in 2006, before the subprime mortgage market collapsed.
"In all my years in the business I have never seen a more toxic product," Mozilo wrote Sambol in an e-mail, referring to subprime loans that let customers borrow 100 percent of a home's value by first borrowing 80 percent in the primary mortgage and then 20 percent in a secondary loan.
The Wall Street Journal reported that the defendants contend that Countrywide made numerous disclosures in publicly available documents. The SEC's written response to the dismissal motions is due by Sept. 18.
Countrywide, based in Calabasas, Calif., was a major player in the market for the subprime mortgages that helped touch off the current financial crisis. The troubled company was bought by Bank of America Corp. in July 2008.
Copyright 2009 AP News