SEC: Countrywide CEO Called Mortgages "Toxic" Three Freaking Years Ago

Today, as expected, is a crappy day for former Countrywide CEO and co-founder Angelo “Orangey Orangerton” Mozilo. The SEC is suing Mr. Mozilo along with several of his colleagues, claiming that they profited from stock sales while hiding information from investors.

The LA Times says that the SEC quotes emails in which Mozilo described Countrywide loan products as “toxic” and “poison” more than three years ago — well before the term “toxic debt” was commonplace.

Here’s the quote:

“In all my years in the business I have never seen a more toxic product. Frankly, I consider that product line to be the poison of ours.”

Harvested from a 2006 email, the quote refers to loans offering no money down to people with terrible credit.

Countrywide denies claims that it misled or concealed information from investors.

“The lawsuit filed today by the SEC does not reflect a balanced or fair consideration of the facts or the law,” David Siegel, a lawyer for Mozilo, said, denying that his client “knew about some undisclosed risk.”

The SEC disagrees.

“In the end, these former Countrywide executives made deliberate decisions to mislead investors,” Robert Khuzami, a former federal prosecutor brought in by SEC Chairwoman Mary L. Schapiro in February to toughen the agency’s enforcement division, said at a news conference in Washington. “They made investors their last priority.”

Countrywide’s Angelo Mozilo is target of federal lawsuit [LA Times]