SEC probe stock sales by Countrywide CEO

Source: Exec Digital USA

Date :18/10/2007 06:05:48

Chief Executive Angelo R. Mozilo is being scrutinized by federal securities regulators as they examine his sales of the struggling company's stock.

The Securities and Exchange Commission's informal inquiry into Mr. Mozilo has been under way for a while, a person familiar with the matter said Wednesday. The person spoke on condition of anonymity because the probe has not been made public.

Share collapse

Mozilo, who moved the company in 1969 from New York to Los Angeles, has guided Countrywide through numerous boom-and-bust housing cycles. Now, Calabasas, Calif.-based Countrywide is cutting thousands of jobs amid the nation's mortgage crisis, and its shares have fallen more than 50 percent since January.

Mozilo sold some $130 million in Countrywide stock in the first half of the year through a prearranged 10b5-1 trading plan. The plans, popular among corporate executives, allow a company insider to set up a program in advance for such transactions and proceed with them even if he or she comes into possession of significant nonpublic information.

The SEC has been casting a wide net in its scrutiny of Wall Street banks, investors, credit-rating agencies and others and the role they played in the subprime mortgage crisis.

Enquiry

North Carolina state Treasurer Richard Moore last week asked the agency to investigate Mozilo's stock sales. Moore raised questions about changes made to Mozilo's plan in the months before the company's stock plunged, allowing Mozilo to significantly increase his sales of Countrywide shares.

Shares of Countrywide fell 38 cents, or 2.2 percent, to $16.97 in extended trading after news of the SEC probe. The stock ended Wednesday's regular session down 74 cents, or 4.1 percent, to close at $17.35 on below-average trading volume.

October 18, 2007

Related Links

Countrywide

SEC