In June 2009 the SEC charged the former Countrywide Financial head with making nearly $140 million in profits by selling his Countrywide stock based on information not yet made public, while publically touting the company's prospects to investors. Additionally Mozilo was also charged with fraud for concealing from investors the true risk involved with some of the toxic mortgages Countrywide Financial provided. The case is still pending.
"People invest in the market precisely because they think they know things others don't."-- Foster Winans
Foster Winans' co-wrote The Wall Street Journal column "Heard On the Street" during the early 1980s. The column was part of the must-reads that kept insiders in the know. But Winans was arrested for letting certain stockbrokers know what would be published in his column before it came out, allowing them time to beat the public on Winans' latest stock tip.
In 2007, Winans wrote an editorial in The New York Times explaining his story. He wrote "I was convicted of using advance knowledge of the content of my columns for The Wall Street Journal to make money in the stock market. I stole from my employer. In its 1987 decision in my case, the United States Supreme Court couldn't decide if what I'd done was insider trading. The vote on those counts of my conviction was 4-4. But by 8-0, the justices ruled that it was fraud: stealing."
Winans served eight months in prison after he was convicted in 1985. The author later wrote about his experience in the book "Trading Secrets: Seduction and Scandal at the Wall Street Journal."