Countrywide Financial, then the nation's largest mortgage lender, had to "draw upon (its) entire (line of credit) to supplement its funding liquidity position." At the same time, SEC filings showed the company's chairman--Angelo Mozilo--was earning millions by selling Countrywide stock as it declined.
In 2010, Mozilo reached a settlement with the SEC, in which he agreed to pay $67.5 million in fines for fraud and insider trading charges, the largest individual fine levied during the financial crises. He also accepted a lifetime ban from serving as a officer of director of a company.
The line of credit was supposed to stave off bankruptcy. Over six years later, even after Bank of America bought the troubled lender in 2008, Countrywide is still on the brink of bankruptcy. In June of this year, BofA said they may have to put the Countrywide home loan division into bankruptcy protection, if they can't reach a settlement with investors seeking $8.5 billion in damages.