I have talked about how subprime was a ripe area for fraudsters here and how the FBI was investigating.

So it's not surprising that Countrywide is now under investigation for securities fraud. As The Wall Street Journal writes, there are questions whether company executives knew about the prospect that Countrywide's mortgage securities would suffer many more defaults than predicted in offering documents and whether they had been honest in accounting for losses.

This will not help the share price which has over the last 52 weeks sunk from $42.24 to as low as $4.25.

Pity about the investors. Still, some people are in the money. Just ask the company's founder Angelo R. Mozilo defending himself against suggestions that he tried cashing in on the Subprime Meltdown.

As the WSJ notes, this entire dirty business would be giving Bank of America second thoughts and Richard Shinnick at SeekingAlpha raises some good questions: Why are you saving Countrywide? Why take this risk? You can build your own national mortgage network! In fact, you already have one! Why do you need this? What are you thinking?

Still, Bloomberg suggests Bank of America is still pressing ahead with its $4 billion merger. Just doesn't make sense.