Former Countrywide CEO Angelo Mozilo Must Face Trial

Angelo Mozilo, former CEO of Countrywide Financial, must face trial on charges he misled investors about the risks associated with subprime lending, a judge in Los Angeles ruled.

U.S. District Judge John F. Walter denied requests from Mozilo and two other former Countrywide executives for a ruling that there were no genuine issues to be tried, Bloomberg News said.

The case is now set for trial in October.

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The SEC sued Mozilo in June 2009, saying he publicly reassured investors about the quality of Countrywide loans, while simultaneously issuing internal warnings and selling about $140 million of his own shares.

Mozilo, co-founder of Countrywide, is the most high-profile figure targeted by authorities investigating the subprime mortgage crisis. He argues that he repeatedly made negative statements about the markets. "Someone trying to benefit from inside information would have painted a rosier outlook," his lawyers said in court papers.

Bank of America (BAC) acquired Countrywide in 2008.