Bad Luck And Trouble

Face it; Countryside's hosed. LATimes (01.10.08):

"Countrywide Financial Corp.'s future was called into question again Wednesday after it reported another rise in loan delinquencies and foreclosures, fueling fresh speculation that the company was headed toward bankruptcy.

The nation's biggest mortgage lender was 'withering' and 'might falter if it does not receive an infusion of at least $4 billion within the next couple of weeks,' said Egan-Jones Ratings Co., an advisor to pension funds and other big investors.

Bankruptcy fears deepen at lender

"Weiss Research, which rates the condition of lenders, said the Calabasas company 'is on a collision course with bankruptcy,' adding that it 'exhausted many of its extraordinary financing options last year and is ill-prepared for the rising mortgage defaults and home foreclosures that are widely expected this year.'"

At least Angelo did OK. Unless the Feds make him give it back.

Ha!! This is funny. Atrios takes us for a spin in the WayBack machine.

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.

Fortuitousness

Wow. Lucky guy, huh. LATimes (09.29.07):

"As the mortgage industry swooned in late 2006 and 2007, Countrywide Financial Corp. Chief Executive Angelo Mozilo cashed in stock options valued at $138 million -- vastly expanding his wealth even as his shareholders watched their stock shrink in value.

Company executives say Mozilo did nothing wrong and that the transactions were made under trading plans that specified how many shares would be sold each month."

Countrywide CEO sold big as stock dropped

"Similar trading plans have been used by hundreds of executives since they were greenlighted by federal regulators in 2000 as a means of fending off accusations of insider trading."

Usually, you sign on to a plan and stick with it, through thick and thin. Not Angelo. "(H)e shifted course twice in late 2006 and early 2007, according to regulatory filings, amid mounting signs of trouble in the housing and mortgage industries."

"Mozilo adopted a new trading plan, added a second and then revised it, allowing him to unload hundreds of thousands of additional shares before Countrywide stock went into a tailspin."

A Countrywide representative said all the stock sales were "'in accordance with company policy'", and that the "'plans were put into place in consultation with Mr. Mozilo's financial advisor, without regard to any non-public or market information'."

None, I tell you. Absolutely none.

Besides. Angelo ain't no chump.