AP) Countrywide Financial Corp. Chairman and CEO Angelo Mozilo cashed in $138 million in stock options over the last year, switching his trading plans as the mortgage company went into a tailspin, it was reported Saturday.
Between November 2006 and August, Mozilo changed the plans outlining how many of his shares would be sold monthly, the Los Angeles Times reported.
Mozilo unloaded 4.9 million Countrywide shares, most of which he bought through exercising options.
Hundreds of executives use similar trading plans, approved by federal regulators in 2000 as a way to defend against insider trading allegations. While not illegal, it is highly unusual for the plans to be changed so often in a short period, experts said.
"If a guy is changing his plan around, I would think that would send up a red flag. I wouldn't allow my clients to do it," said Thom F. Carroll, a financial planner with the Baltimore wealth management firm Carroll, Frank & Plotkin.
Mozilo adopted a new trading plan, added a second one and then revised it while the housing and mortgage industry slumped, the Times reported, citing regulatory findings.
The changes allowed him to sell hundreds of thousands of additional shares before Countrywide stock plunged.
Sandy Samuels, Countrywide's chief legal officer, said Mozilo's stock sales were all "in accordance with company policy."
http://www.cbsnews.com/stories/2007/09/29/business/main3311669.shtml
Interesting... If this is legal for the CEO, the real question is was the Countrywide employees were given financial concerns about last year and gave them an option to sell their shares??? And is there a policy in Countrywide that the CEO and upper management to alert their employees to a possible finanical woes and provide them options???
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