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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerThe timing did seem good. Angelo R. Mozilo, CEO of Countrywide Financial (NYSE: CFC) did sell a lot of stock before the sub-prime mess hit.
Now, The New York Times writes, in "an Oct. 8 letter to the S.E.C. chairman, Christopher Cox, the state treasurer of North Carolina" is questioning the timing of some of Mozilo's sales. "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."
Since Countrywide now trades well below $20, a lot of investors may think that the company's CEO and founder made a killing. He did. That does not mean that he planned it that way. Much of his automatic stock sales program was in place well before the current mortgage market debacle set in.
The acceleration in the selling, however, looks bad, and in this era of tight SEC oversight, looking bad can be bad enough.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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