Countrywide's Mozilo target of SEC probe: report

NEW YORK (Reuters) - The formal U.S. Securities and Exchange Commission investigation of Countrywide Financial Corp concerns whether the mortgage lender's former chief executive, Angelo Mozilo, violated insider trading laws and whether the company's financial disclosures misled investors, the Los Angeles Times said Friday, citing people close to the probe.

Countrywide, its outside lawyers and the SEC did not immediately return calls seeking comment.

On Thursday, Bank of America Corp (BAC.N) disclosed the formal probe and that Countrywide had responded to subpoenas, but did not reveal the subject matter. Countrywide also faces a probe by the FBI, authorities have said, as well as lawsuits by several states over its lending practices.

Mozilo sold well over $100 million of Countrywide stock in late 2006 and in 2007 under automatic trading plans, which are designed to let executives sell shares even if they have material nonpublic information about their companies.

While Mozilo launched such a plan in October 2006, he later revised it, allowing him to sell more shares. This prompted concern that he was accelerating his stock sales as the housing market began to decline.

Last October, after revealing an informal SEC inquiry into his stock sales, Mozilo said on a conference call: "I would like to state categorically that at no time did I make any trading decisions based on material, nonpublic information, and I fully complied with all company policies and applicable securities laws."

Bank of America acquired Countrywide last month for about $2.5 billion.