It looks like former Countrywide Mortgage CEO Angelo Mozilo is going to be sued by the SEC for, “insider trading and failing to disclose to shareholders the risks the company was running”.

At this point, it appears to just be a civil suit, but it appears to me that this is the first step toward a criminal prosecution.

Needless to say, this is a development that puts me in a Nelson Munz state of mind.

The SEC cannot put Mozilo in jail, but a separate federal criminal probe of Countrywide, begun last year, is continuing, one of the people familiar with the SEC case said.

…..

The agency’s staff also is recommending fraud charges against other former Countrywide officials, according to one of the people familiar with the probe, who was not authorized to discuss it publicly and spoke on condition of anonymity.

In the old days, following the excesses of the 1920s, one of the big players did his jail time, and spent the rest of his life earning a modest living running a farm.

If that were to happen to people like Mozilo and Miliken, it would be a good thing, because it would deter those who would be like them.