The SEC also charged the company's former chief operating officer, David Sambol, and former financial chief, Eric Sieracki, with securities fraud for failing to disclose the firm's relaxed lending standards in its 2006 annual report.
As CNBC reported earlier, the charges were not accompanied by any criminal indictments.
Attorney Walter Brown rejected the accusations against his client Sambol.
"The unfortunate reality is that this baseless complaint against Dave Sambol is the result of the tremendous political pressure the SEC is facing given its well-publicized enforcement failures," Brown said. "Making groundless allegations and losing in court will not help the SEC restore its reputation."
Mozilo sold hundreds of millions in Countrywide stock in late 2006 and 2007 and is accused of remaining publicly upbeat about his company's prospects during a period when he knew things weren't going well for the firm. The SEC put the tally of his profits at $140 million.
Countrywide became the nation's largest single home lender during the housing boom and was acquired by Bank of America after much of its business deteriorated.
On the criminal side, an investigation of financial wrongdoing is ongoing at Countrywide involving some of the company's high-level execs. Details on that probe are unknown.