SEC Looks Into Countrywide Stock Sales

CEO of nation's largest mortgage lender dumped $130M in stock before crisis hit
By Will McCahill,  Newser Staff
Posted Oct 17, 2007 10:06 PM CDT
The exterior of the Countrywide home loans office in San Mateo, Calif., Friday, Aug. 17, 2007. It's never been tougher to close a deal than during the past few weeks as lenders have gone bankrupt and...   (Associated Press)
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(Newser) – The CEO of troubled mortgage lender Countrywide is under investigation over stock sales, the Wall Street Journal reports. Angelo Mozilo sold at least $130 million this year of stock in a company deeply affected by the subprime mortgage mess; the Securities and Exchange Commission is looking into several aspects of Countrywide's operation, including executive stock sales.

Last month, the top US mortgage lender announced plans to lay off up to 20% of its workforce of 60,000. Countrywide isn't the only mortgage firm facing an SEC probe, the Journal reports— New Century Financial Corp. is also under scrutiny. Studies have shown the executives often establish plans to sell stock—while dodging insider-trading charges—just ahead of serious price declines.