The Securities and Exchange Commission filed civil fraud charges yesterday against Angelo Mozilo, the former Countrywide chief executive, and his two top lieutenants, alleging that they misled investors about the financial condition of the mortgage company in the months leading up to its sale to Bank of America.

The charges are the first filed by the SEC against a leading chief executive in the subprime mortgage market, an industry which grew robustly early this decade, before imploding when the US real estate bubble burst, the collapse of which triggered the global financial crisis.

For more than a year, the SEC has been poring over the records of Countrywide and New Century Financial, which went bankrupt in 2007, as well as other sellers of subprime mortgages.

Financial Times