Brett Arends
Fair enough.
But isn't it remarkable how insiders always seem to choose the perfect moment to do this? I've already written about this phenomenon at other big housing-related companies like the homebuilder Toll Brothers (TOL Quote - Cramer on TOL - Stock Picks). After you deduct his stock option costs, Mozilo pocketed $338 million in profits from selling shares while times were good. Meanwhile, the investors who bought those shares have already lost $200 million. That's 47 cents on the dollar. This wasn't wealth creation. This was just a wealth ... transfer. Mozilo's personal sales continue. He sold more stock just two weeks ago. He's certainly not doing anything illegal. His trades are made through an executive "10b5-1" stock selling program. For the uninitiated, that means he decides many months in advance to sell the stock. The sales are then carried out independently by a broker, over a period of time, and without any further input by Mozilo. It's a common and sensible system that is supposed to let executives sell shares without running afoul of insider-trading laws. Yet Mozilo's most recent sales were part of a program he set up as recently as last December, and amended in February. By that time, of course, the mortgage market was already falling apart.
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