by D. Cupples | During the final three months of 2007, Countrywide (i.e., the company's shareholders) suffered $422 million in losses. During the last six months of 2007, Countrywide CEO Angelo Mozilo took home $120 million from compensation and stock sales. Now, the Justice Department is reportedly looking into whether securities fraud was involved.
Note that the subprime mortgage crisis has played a part in the recession that our nation now seems to be facing. Though the story is based on anonymous government sources and the FBI hasn't yet confirmed the investigation, the New York Times reports:
"Federal authorities have opened a criminal inquiry into Countrywide Financial for suspected securities fraud as part of the continuing fallout over the mortgage crisis, government officials with knowledge of the case said on Saturday.
"The Justice Department and the Federal Bureau of Investigation are looking at whether officials at Countrywide, the nation’s largest mortgage lender, misrepresented its financial condition and the soundness of its loans in security filings, the officials said....
"The inquiry comes as the F.B.I. investigates 14 companies as part of a wide-ranging review of business practices in the troubled mortgage industry.
"In that broader investigation, the F.B.I. is looking into possible accounting fraud, insider trading or other violations in connection with loans made to borrowers with weak, or subprime, credit.
"The inquiry into the companies began last spring. It involves companies across the financial industry, including mortgage lenders, loan brokers and Wall Street banks that packaged home loans into securities. It is unclear when charges, if any, might be filed." (NY Times)
Over objections from some Republican members, the House Oversight Committee held hearings last week that included testimony from CEOs of Countrywide, Citigroup and Merrill Lynch -- each of whom raked in millions while their companies suffered losses over the sub-prime mortgage crisis.
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