The SEC is charging former Countrywide Financial CEO Angelo Mozilo with fraud and insider trading, according to reports.

Civil charges have also been filed against, Paul Kranhold, the company's former chief operating officer, and David Sambol, the former chief financial officer.

From the AP (via NYT):
The S.E.C. and federal prosecutors have undertaken wide-ranging investigations of companies across the financial services industry, touching on mortgage lenders, the Wall Street investment banks that bundled home mortgages into securities sold to investors, and other market players.

The S.E.C.'s scrutiny of Mr. Mozilo's stock sales began in the fall of 2007 with an informal inquiry.

The filing of the agency's civil lawsuit in federal court in Los Angeles is a striking turn for Mr. Mozilo, the man who 40 years ago co-founded what grew into the nation's largest mortgage lender. He moved the company in 1969 from New York to suburban Los Angeles, guiding Countrywide through numerous boom-and-bust housing cycles.

Of course, this couldn't be good news for Chris Dodd, who has been fending off charges that he received a favorable loan under Countrywide's "Friends of Angelo" program.

Dodd has responded that he did not receive any financial advantage under the program and that it does not affect his ability to regulate the industry as chairman of the Senate Banking Committee.