June 4 (Bloomberg) -- Former Countrywide Financial Corp. Chief Executive Officer Angelo Mozilo and two other people were accused of fraud by the U.S. Securities and Exchange Commission following an investigation of the firm’s role in the subprime mortgage crisis.

The agency will hold a press conference at 4 p.m. today in Washington to discuss the case, it said in a statement. The SEC may accuse Mozilo of withholding information from investors about the mortgage lender’s condition and selling shares based on inside information to avoid losses, people familiar with the matter said, requesting anonymity because the case isn’t public.

Mozilo, 70, is the most prominent executive targeted by U.S. regulators examining the subprime mortgage crisis. In April, the SEC reached a $2.45 million settlement with Michael Strauss, the former CEO of American Home Mortgage Investment Corp., over claims he understated loss reserves before the Melville, New York-based lender’s bankruptcy.

The agency also sued former Bear Stearns Cos. hedge-fund managers Ralph Cioffi and Matthew Tannin last year for allegedly misleading clients about pending losses and redemptions. They have pleaded not guilty to criminal charges.

SEC spokesman John Heine declined to comment on the allegations. All three defendants are expected to dispute the case, one of the people familiar with the matter said.

David Siegel, an attorney for Mozilo at Irell & Manella LLP in Los Angeles, said today in an e-mail before the SEC’s announcement that, “We won’t comment on rumors concerning the matter.”

‘Scandalous’ Allegations

In a statement last month, Siegel said there is no “fair basis for allegations to be made against Mr. Mozilo” and that assertions he had sold stock on nonpublic information are “scandalous and inconsistent with even a cursory examination of the facts” surrounding the sales.

Mozilo co-founded Countrywide in 1969 and built it into the nation’s biggest mortgage lender, helping trigger the subprime bubble by offering loans to customers with below-average credit scores. Mounting loan defaults slashed the company’s stock price, prompting its sale to Bank of America Corp. last year.

The agency may also target former Chief Operating Officer David Sambol and former Chief Financial Officer Eric Sieracki, the Daily Journal, a Los Angeles legal newspaper, reported yesterday, citing unidentified attorneys familiar with the situation. The regulator may accuse the executives of inadequately describing the company’s lending standards in its 2007 annual report, it said.

Mozilo sold the lender’s stock in 2007 under at least two automated trading plans, according to regulatory filings at the time. He said that year that he had arranged to reduce his stake after being advised to diversify his investments. The SEC doesn’t have jurisdiction over mortgage-lending practices.

To contact the reporter on this story: David Scheer in New York at dscheer@bloomberg.net; Karen Gullo in San Francisco at kgullo@bloomberg.net.

Last Updated: June 4, 2009 15:41 EDT