Thursday, October 11, 2007

File this under...

a) hmmm, don't smell right
b) uh, I wouldn't do that if I was you
c) my name is Ken Lay and I'm back from the dead
d) crap, I have my mortgage with them. I'M NOT JOKING!

Stock Sales by Chief of Lender Questioned

By GRETCHEN MORGENSON
Published: October 11, 2007
The Securities and Exchange Commission has been asked to investigate stock sales made by Angelo R. Mozilo, chief executive of the mortgage lender Countrywide Financial, in the months before its shares plummeted amid the deepening mortgage crisis.

In an Oct. 8 letter to the S.E.C. chairman, Christopher Cox, the state treasurer of North Carolina, Richard H. Moore, questioned changes Mr. Mozilo made to his arranged stock selling program, adjustments that allowed him to increase significantly his sales of Countrywide shares.

After starting a plan in October 2006, Mr. Mozilo twice raised the number of shares that could be sold: once in December 2006, when Countrywide stock was $40.50, and again in February, when it hit a high of $45.03. He has had gains of $132 million since starting the October 2006 plan and expects to sell his remaining shares by the end of the week, a move that will generate millions more.

“As an investor and a Countrywide shareholder, I was shocked to learn that C.E.O. Angelo Mozilo apparently manipulated his trading plans to cash in, just as the subprime crisis was heating up and Countrywide’s fortunes were cooling off,” Mr. Moore wrote. “The timing of these sales and the changes to the trading plans raise serious questions about whether this is a mere coincidence.”
Letter from Richard H. Moore, North Carolina Treasurer (pdf)

NEW YORK TIMES