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U.S. regulators have recommended filing a civil fraud suit against Countrywide Financial co-founder Angelo Mozilo for insider trading, the Wall Street Journal reported on Wednesday.
Staff at the Securities and Exchange Commission had decided to recommend filing the suit against Mozilo, who co-founded the No. 1 U.S. home-mortgage lender taken over by Bank of America, the Journal cited people familiar with the investigation as saying.
According to the Journal, the SEC sent a "Wells" notice to Mozilo weeks ago alerting him of the planned charges, which included alleged violations of insider-trading laws, as well as failing to disclose material information to shareholders.
Bank of America [ BAC 14.5118 
+0.0318 (+0.22%) ] last month dropped the Countrywide name from its mortgage operations, shedding a 40-year-old brand that became synonymous with risky lending practices that helped fuel a U.S. housing boom and bust.
A Wells notice is a precursor to a civil lawsuit in an SEC investigation. It outlines to an individual or company under investigation what allegations might be filed against them and gives a target a chance to respond to the allegations.
A civil suit against Mozilo, if his lawyers fail to deflect it and SEC commissioners approve a filing, may be announced in coming weeks, the Journal cited unidentified sources as saying.
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