Thursday, October 18, 2007

Hold On Thar

Oh well, what the hell. Sure was fun while it lasted. LATimes (10.17.07):
"Securities regulators are said to be looking into $145 million in stock sales by Countywide Financial Corp. Chief Executive Angelo Mozilo, who ramped up his sales in the months before Countrywide's shares went into a tailspin."

SEC is said to be investigating Countrywide CEO's stock sales

The nub of the problem is the insider trading plan Angelo had. "Such plans are designed to shelter executives from insider-trading allegations by setting up in advance a schedule for the purchase or sale of company shares." Usually, you set it and leave it alone, but that's not what happened here.

Angelo first set his plan up back in Fall of 2006, "just as the subprime crisis was getting under way. That plan allowed him to sell 350,000 Countrywide shares per month. Less than two months later, he adopted a second plan, allowing him to sell an additional 115,000 shares. He revised the second plan less than two months later to double the number of shares sold. By February, Mozilo was unloading 580,000 Countrywide shares each month."

Therein, as they say, lies the rub.

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