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TMFBent (99.85)

Mozilo's big dump draws SEC scrutiny.

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11

June 04, 2009 – Comments (4) | RELATED TICKERS: BAC

It's about friggity time.

On June 4, 2009, the Securities and Exchange Commission announced the filing of securities fraud charges against former Countrywide Financial CEO Angelo Mozilo, former chief operating officer and president David Sambol, and former chief financial officer Eric Sieracki. They are charged with deliberately misleading investors about the significant credit risks being taken in efforts to build and maintain the company’s market share.

The Commission has additionally charged Mozilo with insider trading for selling his Countrywide stock based on non-public information for nearly $140 million in profits.

Here's a graph of the shares Mozillo dropped on the market before coming clean about how bad things were going to get at Countrywide. Sambol was a piker, by comparison. Only unloaded $22 million worth. Amateur. Shoulda emulated his big orange boss a bit more.

Wonder if Maria Bartiromo and the rest of the Mozilo-enablers out there will take their jobs a bit more seriously now, instead of just lobbing softballs to them while they're dumping like crazy into the top of the biggest bubble the world has ever seen.

Sj

4 Comments – Post Your Own

#1) On June 04, 2009 at 5:06 PM, TMFBent (99.85) wrote:

Here's what Mr. Orange was telling his employees, according to the SEC.

According to the SEC’s complaint, Countrywide’s credit risks were so alarming that Mozilo internally issued a series of increasingly dire assessments of various Countrywide loan products and the resulting risks to the company. In one internal e-mail, Mozilo referred to a profitable subprime product as “toxic.” In another internal e-mail regarding the performance of its heralded Pay-Option ARM loan, he acknowledged that the company was “flying blind.”

At the same time, he was telling everyone else that things were okey dokie, and dumping hundreds of millions of dollars worth of shares onto the bagholders in the open market.

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#2) On June 04, 2009 at 5:09 PM, TMFLomax (27.44) wrote:

Yeah I'm really glad to see this. I remember us talking about this stuff... Seth didn't you write some good articles on this at the time for Fool.com... I seem to recall you did.

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#3) On June 04, 2009 at 5:13 PM, goldminingXpert (30.70) wrote:

There's a warm place in hell waiting for Mozilo.

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#4) On June 04, 2009 at 5:17 PM, TMFLomax (27.44) wrote:

Nice... yeah, some Danta-esque Inferno type scenario of some sort perhaps...

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