It really doesn’t look good. Countrywide Financial (CFC) CEO Angelo R. Mozilo sold tons of stock in the period before the sub-prime markets caved in. According to The New York Times, he "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 was rich, and got richer while a lot of his customers went broke.
Now, the treasurer of North Carolina has written the head of the SEC and asked the agency to look into the sales. “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 sub-prime crisis was heating up and Countrywide’s fortunes were cooling off,” Mr. Moore wrote.
The charge may or may not be true. But the wording of the letter is probably why the treasurer of North Carolina cannot get a real job making money in the private sector. While the statement in his letter may be accurate, he would have no way to prove that. If he could, there would be no reason to send a letter to the SEC.
Mr. Mozilo may be a nasty fellow. His company may have offered mortgages to people who could not pay them back. He may not go to heaven when he dies.
But, North Carolina can’t prove a word of what it is charging. So, it would be wise to keep the rhetoric to a dull roar and let the SEC do its work.
Douglas A. McIntyre
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