Carolina on Countrywide's Mind

Countrywide Financial (CFC Quote) shares tumbled after the head of a state pension fund demanded that regulators investigate CEO Angelo Mozilo's insider selling spree.

Richard Moore, North Carolina's state treasurer and the head of the state's pension fund, asked the Securities and Exchange Commission to investigate the timing of changes Mozilo made to his prearranged stock-selling plan.

Moore writes in a letter sent Monday that the longtime Countrywide exec repeatedly made changes to his 10b5-1 stock-selling plan that allowed him to "increase significantly" his stock sales ahead of bad news that sent shares of Countrywide tumbling. Countrywide shares have lost 60% of their value since February, when investors learned that subprime mortgages were going bad at record rates.

"There is a tremendous amount of smoke," Moore said in an interview on CNBC Thursday morning. "They changed those selling plans when the market started to smell a change" in industry fundamentals.

The SEC didn't comment, citing policy. A spokesman says the agency's enforcement division is focusing generally on CEO stock sale plans, however. Countrywide didn't immediately return a call seeking comment.

Mozilo has reaped more than $90 million in stock-sale profits this year alone, after he cashed out to the tune of $72 million last year. Last Friday, Countrywide issued an unusual press release that acknowledged that Mozilo would accelerate his selling of Countrywide stock this week after the stock fell below levels at which the sales usually took place.

"I recognize that the company's stock is currently under pressure," Mozilo said in the release. "However, the terms of the 10b5-1 Plan that I established in October 2006 require that these sales be executed."