SEC Probe Report Tans Countrywide's Hide

Countrywide CFC shares dropped 3% on reports that regulators are investigating the stock-sale bonanza being reaped by CEO Angelo Mozilo.

Citing people familiar with the matter, The Wall Street Journal reported after the market closed Wednesday that the Securities and Exchange Commission opened an informal investigation into Mozilo's stock sales.

Countrywide didn't immediately return calls seeking comment. The SEC, citing policy, didn't comment.

The news comes just a week after Richard Moore, North Carolina's treasurer, asked the SEC to investigate Mozilo's insider selling spree. Moore questioned the timing of changes made to Mozilo's executive stock sales plan.

"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."

The SEC has said in recent weeks that it is making enforcement of the terms of the pre-arranged selling plans -- known as 10b5-1 plans -- a priority.

Mozilo has netted $100 million this year alone dumping his Countrywide stock, on top of $72 million in stock-sale gains last year. Meanwhile, shareholders in the Calabasas, Calif., mortgage lender have seen the value of their investment tumble by $14 billion since February.