Countrywide's Mozilo Charged With Fraud

Their triple-A-rated securities are now junk, they claim

(NEWSER) - Investors are suing Bank of America’s Countrywide mortgage unit, claiming they were fraudulently led into purchasing supposedly triple-A-rated mortgage-backed securities that turned out to be junk. Between 2005 and 2007, the investors bought hundreds of millions of dollars of securities that were supposed to be “conservative” and “low-risk.” But Countrywide misrepresented just how safe those securities were, and also ignored its own underwriting guidelines, the lawsuit claims. More»

After Ponzi scheme debacle, regulator is back, with bigger fangs

(NEWSER) - Having let the Madoff scandal unfold virtually under its nose, the SEC sounded an alert with the announcement of its lawsuit charging Goldman Sachs with fraud. "The message: The SEC is back on the job," Greg Gordon writes for McClatchy . "The release is very judgmental about the conduct, almost scolding," says a law professor, contrasting the tone with the Bush-era SEC's style. "And those releases get done at the highest level." More»

Fraud charges kneecap stock price; observers play wait-and-see

(NEWSER) - The SEC's civil suit against Goldman Sachs is hardly a slam-dunk, experts agree, but the scrutiny is certainly not doing the firm any good . Some reactions:

• This "is explosive stuff," Felix Salmon blogs for Reuters . "Goldman Sachs has lost more than $10 billion in market capitalization today, in the wake of these revelations. Good. It can go long markets and it can go short markets. But it can’t lie to its clients."

(NEWSER) - The long slide from the top continues for former Countrywide chief Angelo Mozilo. Staffers at the SEC have recommended filing a civil suit against him on charges of fraud and insider trading, reports the Los Angeles Times. Countrywide had been the nation’s largest mortgage lender before it nearly went belly up last year and was acquired by Bank of America. More»

State blames company for foreclosures

(NEWSER) - The state of Illinois will sue Countrywide and its CEO today for "unfair and deceptive practices" in the first suit related to the current mortgage crisis. The company is accused of pushing loans on homeowners even if they couldn't repay them, the Wall Street Journal reports. Illinois' attorney general blamed Countrywide's actions for widespread foreclosures. More»