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Mozilo Cashed Out at Top of Market

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 - Get Report).

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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