The Five Dumbest Things on Wall Street This Week
1. Countrywide Crock
Countrywide (CFC) CEO Angelo Mozilo is feeling the heat.
Richard Moore, North Carolina's press-shy treasurer, asked the Securities and Exchange Commission to investigate Mozilo's insider selling spree. The CEO has netted $100 million this year alone dumping his Countrywide stock. Meanwhile, shareholders have seen the value of their investment tumble by $14 billion since February.
Moore is asking the SEC to look into changes Mozilo made to his pre-arranged stock-sale plan over the past year. Moore, who runs a pension fund that owns $9 million in Countrywide stock, says the changes conveniently enabled Mozilo to sell more stock just before news in the mortgage industry turned sour."As one of many investors who have felt the painful losses in Countrywide stock, I am outraged at his manipulation of the system and this abuse of shareholders," Moore wrote in the Oct. 8 letter. "The timing of these sales and the changes to the trading plans raise serious questions about whether this is mere coincidence." Moore has tried raising serious questions with Countrywide before, to no avail. He said he sent the company's board a letter last month asking it to investigate Countrywide's internal executive compensation policies, among other matters. He says he received a "polite response" indicating the board saw no reason to act. In contrast, Mozilo remains a man of action. Countrywide said last Friday that even with all the stock Mozilo sold over the last year, he still has some options he hasn't cashed in. He'll take care of that, Countrywide said, by selling stock at prices below the floor specified in the preset selling plan. Mozilo conceded that the stock "is currently under pressure," but indicated that other considerations loom larger. "The upcoming sales are driven by rules within the 10b5-1 Plan that were established long ago," Mozilo said Friday, "and should in no way be viewed as any indication of my future outlook for Countrywide." Here's betting he'll always view Countrywide as his personal piggybank. Dumb-o-Meter score: 93. "Countrywide's leadership stuffed the company's pockets, as well as their own, with short-term profits," Moore wrote last month, "but long-term value was decimated."
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