Butcher's Boy on the Chopping Block

Apparently, I'm not alone in casting the hairy eyeball on hundreds of millions of dollars' worth of stock dumping by Countrywide Financial (NYSE: CFC  ) CEO Angelo Mozilo. (Nor are some very vocal critics at various housing bubble and mortgage bubble blogs.) The Wall Street Journal now reports that the Securities and Exchange Commission is taking an "informal" look at Mozilo's pattern of selling, precisely at the time the housing bubble was deflating and his business started sagging. However, official spokespersons note that the SEC is merely checking him out as part of a wider investigation of potential insider trading within the bounds of so-called 10b5-1 plans.

These plans supposedly restrict executives from trading on insider knowledge, but not long ago, an academic study by Alan Jagolinzer suggested that by modifying these plans on the fly, executives are actually able to game their gains, holding up sales until positive news can move the stock up, or speeding up the dumping before things really get ugly.

Doesn't surprise me at all. In the past, I've written about executives whose well-timed, accelerated "diversification" or "estate planning" maneuvers just happened (so they claimed) to run ahead of lousy results, to their pocketbooks' benefit. Looks to me like the "aw shucks," son-of-a-butcher Mozilo has been doing the same thing. His suspiciously vocal, preemptive PR strike ahead of his most recent share-dumping only reinforces that conclusion.

For more on Countrywide and the housing meltdown, see


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 538758, ~/Articles/ArticleHandler.aspx, 10/26/2014 12:33:13 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement