July 28, 2007

Here's Countrywide Mortgage's Angelo Mozilo trying to defend why he sold $118 million in CFC stock before his company crashed

It's funny reading this on the same day that Qwest's former CEO Joe Nacchio was sentenced to six years in Federal prison and $52 million for insider trading and pumping up his numbers while he bailed out. Deja vu all over again? Hey, nobody saw it coming, right Angelo?

And for a CEO to be desperately selling as the company he runs is doing stock buybacks to prop up the price, man, that stinks to high heaven.

Ronald Redfield - Redfield, Blonsky & Co.: Were there any buybacks during the quarter? Do you find, Angelo, with all respect, you selling a material amount of shares into buybacks? You previously mentioned you own 10 million shares. How many shares do you currently own, not including options?

Angelo Mozilo: I don't know the answer to that question. I own -- including options, I think around -- I think it is around 11, 12 million, something like that. The sales of the stock had nothing to do with buybacks because that 10b5-1 agreement was made well over a year ago.

Ronald Redfield - Redfield, Blonsky & Co.: No, the legality is fine, but
one can think that perhaps the price is being held up the buybacks creating a demand.

Angelo Mozilo: Yes, well, if you think like that it's -- I don't think like that. The buybacks were done because we thought it was in the best interest of shareholders. I have -- as somebody pointed out, I'm 68 years old, I own a lot of shares, and I have 10b5-1 that is in process right now. That is selling into this market when the buybacks are not holding it up.

So it is an independent issue that is not relevant to buybacks or not buybacks. It is a personal situation that I'm selling into a market no matter where the price of the stock is.

Angelo Mozilo: Okay, some final comments. One to the individual who asked about my sale of stock. The decision to buy back stock is a collective decision, really emanates from the financial operations of the Company as to what is the best return for the investment of the shareholders, invested capital for the shareholders.
So it is totally unrelated to any of my issues relative to the sale of stock.

Secondly, as I said, I don't know the exact amount of shares that I have. But the shares that I have, actual stock I have, I have retained for 39 and a half years. Not sold a share of the initial stock that I got when Dave and I started this Company that I got, that I purchased.
The only thing that is being sold under the 10b5-1 are options with expiration dates.


Anonymous said...

And for a CEO to be desperately selling as the company he runs is doing stock buybacks to prop up the price, man, that stinks to high heaven.

Yep. SOP in the new Amerika comrade. The only question is to which foreign country will he be ambassador after the CFC crash begins in earnest?

Anonymous said...

But CFC is taking market share!

Anonymous said...

He's a criminal. Living in CA, he should know of another banking criminal organization named Providian Financial. (A San Francisco sub prime credit card issuer that nearly went bankrupt in 2001).

Angelo's little syndiate outfit is going down just like Providian did. If you want to make a ton of $$ off Angelo going to jail, just research and learn about what happened to Providian Financial.

Anonymous said...

Say hi to Bubba in prison for us. hahahahaha

Anonymous said...

"The only thing that is being sold under the 10b5-1 are options with expiration dates....."
If true, what's the big deal?? I had to do the same thing 3 months ago....granted on a MUCH smaller scale :)

anonymous wimp said...

How about a $200 million dollar fine and we call it square?

Anonymous said...

He's Toast!!

Literally, just look at him!!

Shakster said...

Joe Nacchio.......first pony to the show. Martha will be calling soon.
This really is Deja Vu all over again.
Wonder who the new Terrorists will be in Dot Bombs PartII?

benevolentstranger.blogspot.com said...

He's not quite orange or crispy enough...I think he needs to shake and bake longer!

Anonymous said...

Serious question what color is he supposed to be?

Anonymous said...

That Sunkist Muther F**ker!

Anonymous said...

He doesn't look human anymore. It's like the Italian Michael Jackson.

CFC - It's never good to borrow money at 7% for stock buybacks.

Anonymous said...

Mozillo must HATE this blog

Anonymous said...

is countrywide still hiring and buying competetors? didn't they borrow $2B the other day?

when this big kahoona falls, all hell will break loose....

kitchenstove said...


benevolentstranger.blogspot.com said...

Ok, Moz needs a reality check.

1st: Most of these contracts or options expire 2016, 2015, 2014, 2013, 2012, 2011 respectively.

2nd: He ducks and covers by using a POA -power of attorney having someone else dispose and acquire the shares. (Plausible deniability “I don’t know how many shares I have in my name.”)

3rd: Regardless of the fact that he may have a 10b5-1 plan, it is noteworthy to mention that while most directors create these to avoid SEC investigations and have their benefits curtailed by automatic withdraws or purchases, he has been busy with the options the last consecutive months whether inadvertent or not – boosting the shares and artificially diluting the value afterwards.

4th: He may be 68 but his term does not end until 2008 and he is in a holding pattern on his shares through his family trust, 401k, and his wife’s holdings. (What no buyback with your own funds?)

5th: He served on the Mortgage Bankers Association of America board and was president of the association in the 90's. (Think what the NAR is to the Realtor but this group is for the Mortgage Brokers)

6th: He serves on board of directors of the Harvard Kennedy School Joint Center for Housing Studies and as trustee of the National Housing Endowment (a/k/a donate money to your alums and generate strategic joint venture businesses)

Happy Hunting…