The SEC has begun an informal inquiry into the stocks sales by Countrywide Financial's (NYSE: CFC) CEO Angelo Mozilo. The Wall Street Journal reports that he "sold at least $130.6 million in company stock in the first half of the year through executive sales plans."

Mozilo sold the shares under a standard 10b5-1 which allows insiders, executives and board members, to sell shares on regular schedules without the normal black-out dates for earnings releases and other events. The number of shares and dates are set ahead of time.

Although it is not clear, the issue here may be whether Mozilo altered his plan and accelerated his selling based on his knowledge. He could have kept his plan in place, but made alterations. This would likely have been against both the spirit and wording of these plans when they were first developed. As the Journal pointed out, "If executives pledge they don't have any insider information at the time the plans are established it can be used as a defense against insider-trading charges." That does not cover what happens if they come by the information later and alter the plans.

The investigation is likely to be complex and may take a number of months.

Douglas A. McIntyre is a partner at 24/7 Wall St.