CEO of Countrywide Confirms SEC Probe into Sold Shares

Angelo Mozilo, Countriwide Financial’s CEO, confirmed today that the US Securities and Exchange Commission has opened an informal inquiry into his stock sales.

Mozilo’s stock sales have drawn some recent media attraction due to the volume of the shares and the timing. He sold more than $100 million dollars in shares since last October. Mozilo defends this by stating that at no time did he make any trading decisions based on material, nonpublic, information, and that he fully complied with all Countrywide policies and applicable securities laws. Mozilo’s sales were under a plan known as a 10b5-1 which allows corporate bosses to set a long-term pattern of regular future sales, helping them avoid accusations that they may be taking advantage of share price spikes. The problem is that Mozilo changed his plan twice within four months of establishing it in October.

On the lighter side Countrywide stocks went up over 32 percent today after the announcement of their third quarter earnings. Countrywide announced that they had a 1.2 billion dollar third quarter loss. This quarterly net loss totaled $2.85 per share and was their first in 25 years. When they announced their loss they also assured investors that it forecasts a return to profit this quarter and that it has weathered the worst of the nationwide housing downturn.

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