BulletProofBlog the blog on crisis communications

The action that had been expected for almost a month - and what, it now turns out, had been in the offing since before the subprime mortgage meltdown publicly gave way to a global financial crisis - finally came to pass yesterday when the Securities and Exchange Commission (SEC) brought civil charges of fraud and insider trading against former Countrywide Financial Chairman and CEO Angelo Mozilo.

As the face of the company at the center of the subprime mortgage market since 2005, Mozilo' s transformation from widely-respected business leader to villain responsible for all that ails the U.S. economy was, tragically, inevitable.

For the SEC, decisive action was also a must. And with a renewed focus on punishing wrongdoers and protecting investors serving as top priorities for SEC Chairman Mary Schapiro, the man alleged to have lined his pockets while shareholders lost money is as good a target as any - especially in the Court of Public Opinion.

As the poster child for excess (be it risk, compensation, or defiance of reality), Mozilo gives regulators and the plaintiffs' bar an important symbol - and one that stands in contrast to the importance of today' s financial giants being seen as leaders in solving the problems at hand.

When concerns over the excessive risks of the subprime mortgage market were first raised, Mozilo had a chance to voice his plans for weathering the coming storm - and the bully pulpit from which to articulate them. Instead, he allegedly publically denied the severity of the issue while privately taking a different path.

It is precisely the perception of that duplicity that wounded shareholders, homeowners, and regulators will not tolerate.

Michael W. Robinson is Senior Vice President of Corporate and Finance at Levick Strategic Communications and a contributing author to Bulletproof Blog.