The US Securities and Exchange Commission is investigating stock sales made by Angelo R. Mozilo, the chief executive of Countrywide Financial, shortly before the lender fell victim to America’s mortgage crisis and its share price plunged.

The inquiry into whether Mr Mozilo acted on inside information is centred on changes that he made to a stock-selling programme that allowed him to speed up his sales of Countrywide shares and reduce his exposure to their price declines.

The investigation, which Countrywide and the SEC refused to comment on, is the latest development in the crisis which began with a surge in high-risk “sub-prime” mortgage lending, leading to a jump in defaults, which is dragging down US house prices and which prompted a wide-scale credit crunch.

Thousands of jobs have been cut at mortgage companies and the Wall Street firms that deal in related securities. Billions of dollars of investments have been lost, and previously agreed buyouts are being cancelled and renegotiated as the debt markets dry up.

Some brokers and mortgage groups are being investigated on suspicion of fraudulent lending, by helping borrowers to falsify income documents.

But Mr Mozilo is the first public case of alleged share price manipulation as the fallout from the sub-prime crisis spreads.

He began a stock sale plan in October 2006, specifying the number of shares to be sold in a move designed to protect against accusations of insider trading.

But Mr Mozilo twice raised the number of shares that could be sold.

The first time, in December 2006, when they were $40.50, he increased the number he intended to sell each month from 350,000 to 465,000.

The second time, in February, when they hit a high of $45.03, the number jumped to 580,000, according to regulatory filings.

Shares in Countrywide, America’s biggest mortgage lender, have since fallen to less than $20, after it announced in July that second-quarter profits had declined by 33 per cent as problems in its sub-prime mortgage book spread to mainstream home loans.

In September, Countrywide was forced to tap an $11.5 billion (£5.7 billion) credit line as it became difficult to access short-term debt. Bank of America then injected $2 billion into Countrywide to prop up its operations and last month the group said it would fire up to 12,000 staff.

Richard H. Moore, the state treasurer of North Carolina, which has significant exposure to Countrywide through state pension plans this week urged the SEC to investigate Mr Mozilo’s actions, although it is understood that the watchdog was already investigating them at that point.

“As a Countrywide shareholder, I was shocked to learn that Angelo Mozilo apparently manipulated his trading plans to cash in, just as the sub-prime crisis was heating up and Countrywide’s fortunes were cooling off,” Mr Moore wrote to the regulator.

“The timing of these sales and the changes to the trading plans raise serious questions about whether this is a mere coincidence.”

Mr Mozilo has been selling shares through arranged schemes since 2004, and has generated $300 million in gains since 2005.

Home foreclosures in the US doubled in September from a year before, but were down on August. There were 223,538 foreclosure filings last month, including bank repossessions, 8 per cent fewer than in August, according to RealtyTrac research.