CALPIRG Blog

SEC Calls Countrywide Chiefs, Crook

The SEC announced that they will be filing civil charges against Countrywide CEO Angelo Mozilo and several other company executives.  The charges include lying to investors about the strength of the company and insider trading.  Here is the link to the LA Times story.

I don’t harbor any warm feelings for the folks over at Countrywide, but if the SEC was a better equipped agency Mozilo and his buddies would have ended up in jail before they had the chance to cripple the housing market.  Making these people stand trial is fine, and if they broke the rules they should be punished, but as long as the oversight is lacking there will be a dozen Mozilos out there figuring out how to game the system.

Agencies like the FDIC and the SEC need more authority to really see what is going on within financial institutions so they can flag problems before they become catastrophic.  In addition to protecting investors, the federal government should take a serious look at creating an agency that monitors the financial products available to consumers.