October 02, 2007

Will Countrywide Toxic Mortgage's Angelo Mozilo go to jail?



A) Yes
B) No
C) Not soon enough

Here's another couple of stinging exposes of The Orange One by Bloomberg and Krugman at the NY Times. Nice to see (again) the MSM catch up to HP. I especially liked the point that the damage caused by Mozilo to Americans (and foreign investors) is SIGNIFICANTLY worse than anything Ebbers or Lay did. SIGNIFICANTLY worse.

Note I'm short CFC via Oct puts.


Countrywide CEO sold big as stock dropped - Quick changes in Mozilo's trading plan raise red flags, experts say. The mortgage firm says the sales were in line with company policy.

As the mortgage industry swooned in late 2006 and 2007, Countrywide Financial Corp. Chief Executive Angelo Mozilo cashed in stock options valued at $138 million -- vastly expanding his wealth even as his shareholders watched their stock shrink in value.

"There is clearly no legal prohibition of altering your plan," said David Priebe, a Bay Area attorney who has helped set up more than 50 of such plans for executives. "But the more that you modify or add to your plan over a short period of time, the more risk that someone will call it into question. I would not say that you cannot do it. I would say there is a risk if you do do it."

And now here's Krugman highlights:


Enron’s Second Coming?

These days, of course, Mr. Mozilo doesn’t look like such a wonderful guy, after all. Instead, he’s starting to bring back memories of other people who used to be praised not just as great businessmen but as great human beings — people like Enron’s Ken Lay and WorldCom’s Bernie Ebbers.

So far, nobody has accused Mr. Mozilo of breaking the law. Still, what we’re learning from the housing mess is that the crisis of corporate governance, which made headlines in the early years of this decade, never went away.

Still, how can it be that so soon after Enron, WorldCom and other scandals rocked the business world, we’re once again hearing about executives cashing in just before their companies are revealed as less successful than advertised? The answer, of course, is that we never dealt properly with those scandals.

There is one big difference this time: the number of victims — misled borrowers, homeowners whose neighborhoods are being destroyed by foreclosures, investors who thought they were buying safe assets — is even larger.

25 comments:

Anonymous said...

Ironically CFC has been up the past few trading days. Apparently the sheeple think its all over, 100's of billions are in the midst of evaporating and somehow its just over like that w/ a Fed Cut and some words by Greenspan & Company? I thought financial markets worked based upon fundamentals & not wishful thinking? So if all the banks are going to be writing down billions of debt over the next couple of years then their stocks should go down not up. I guess we just have to wait for a few more sets of quarterly reports to let reality set in?

DOPES said...

Give the guy a break - he's just trying to get by like us.

Paul E. Math said...

Jail, couldn't happen to a nicer guy.

I think they should consider broadening the the customary applicability of such judicial remedies as capital or, at the very least, corporal punishment.

Anonymous said...

No. He has too much money.

Anonymous said...

Paul Krugman predicted a recession in 2002, 2003, 2004, 2005, 2006.

Why would you care what he has to say?

As for mozillow, he should most certainly not go to jail. He sold stocks in his own company over a few years. That is not a crime.

I know to you communists anyone making a profit is a criminal. Not in the real world.

Anonymous said...

Oh and how is everyone's shorts doing? I remember all you clowns were shorting CFC when it was at $17 and $18. How's all that working out?

SPECTRE of Deflation said...

Let the bastard eat cake...as he walks the plank!

SPECTRE of Deflation said...

Anonymous said...
Paul Krugman predicted a recession in 2002, 2003, 2004, 2005, 2006.

Why would you care what he has to say?

As for mozillow, he should most certainly not go to jail. He sold stocks in his own company over a few years. That is not a crime.

I know to you communists anyone making a profit is a criminal. Not in the real world.

October 02, 2007 12:57 PM

One word for your thought...moron!

AKA Realtor said...

What a POS.He should be in jail along with casey serin as a cellmate.I cannot imagine a woman being attracted to anything but money with that ugly mug.

Screw the shareholders as usual.What a rigged game.

Happy Homedebtor said...

The evil orange prune will go to jail - he will serve as a symbol of all the problems in the mortgage/housing market and as such, be sent straight to jail. As with Lay and Skilling, they both deserved it as well - they were not alone, but they were used to quell the public while the rest of the thieves skittered away in their shadows to safety.

I think the gov't is waiting to see where we land, before moving in. After all, it took quite awhile before the guys @ Enron started shooting themselves and going to jail.

Also, they can't let Countrywide fail or it'd be anarchy - so once things are stable, look forward to seeing Mozilo doing hard time. You guys should decide which to root for - a faster bottom to the market so Angelo can go to jail, or a deeper, longer cratering - at which point, he may not live long enough to go behind bars. :P

Anonymous said...

While I dislike Tangelo almost as much as I dislike Greenspan, I don't see where he has done anything illegal. Unethical, immoral, irresponsible - yes. Illegal - no.

Anonymous said...

Anonymous said...
Oh and how is everyone's shorts doing? I remember all you clowns were shorting CFC when it was at $17 and $18. How's all that working out?

October 02, 2007 12:59 PM
-------
The fat lady [strike that] the old wrinkled leather faced tangzilo has not been bent over yet.

Anonymous said...

I have sad news. Barron's listed Mr. Mozilo as one of the 30 most respected CEOs in the world for the past three years, but unfortunately the orange guy won't be on this year's list.

Anonymous said...

communists

renters

wackjobs

tinfoilhatters

HPers

What a club you have here.

Anonymous said...

Oh and how is everyone's shorts doing? I remember all you clowns were shorting CFC when it was at $17 and $18. How's all that working out?

Going well - thanks I bought my puts at 32 bitches! I'm up huge.

Of course I lost on the same bet last year. But, I'm almost back to even...

pwnd

Anonymous said...

.


My shorts are great, thanks for asking!




I've only filled them once today!




.

FlyingMonkeyWarrior said...

I showed a stock broker all of Mozilo's trades (dumps) posted here, and his shocking remark?

"Good for him."
ugh

FlyingMonkeyWarrior said...

communists

renters

wackjobs

tinfoilhatters

HPers

What a club you have here.
^^^^^^^^^^^^^^^^^^^^^^^^^^^
Yes, it is fun, isn't it.
That is why YOU are here, right?

DAGG said...

"Oh and how is everyone's shorts doing? I remember all you clowns were shorting CFC when it was at $17 and $18. How's all that working out?"

I've been shorting them since $32, I've doing very well, thank you for asking. bought it when Cramer recommended a buy buy buy on CFC. thanks Cramer

Anonymous said...

Oh and how is everyone's shorts doing? I remember all you clowns were shorting CFC when it was at $17 and $18. How's all that working out?

October 02, 2007 12:59 PM

Wrong @#$$@#!

How about $38 short!

brokersleaveyoubroke said...

Anon. said

While I dislike Tangelo almost as much as I dislike Greenspan, I don't see where he has done anything illegal. Unethical, immoral, irresponsible - yes. Illegal - no.

If you sell stock in your company because you know something that the general public does not yet know then you most certainly committed a crime. If the fed can prove that he had access to information that would be adverse to the stock price (an increase in defaults for example) and he dumped a lot of stock before he made that information public, he could be in for a perp walk.

brokersleaveyoubroke said...

Anonymous said...
communists

renters

wackjobs

tinfoilhatters

HPers

What a club you have here.

Let me guess. Every night before you lay down you check under the bed to see if there are any communists under it, right? Good grief, the tinfoil hat guy is less paranoid then you are.

Anonymous said...

I like it that Krugman points out that the reason this outright corporate fraud is repeating itself is because it was never dealt with before. Every time it happens it just gets pushed under the rug and back to party central as usual.

On a parallel note, the Fed created this bubble and is now engaged in bailing out and "hiding" the culprits who helped it happen. The Fed is even buying up crappy mortgages from these companies so that things stay hidden!

Here's my question: Can the Fed, being the lender of last resort, IMPLODE ITSELF by buying up all this crap?

If so, then I hope they keep on buying and buying til they cease to exist.

Shakster said...

He should call Martha for some pointers at Club FED.
Speaking of Martha,Can We Arrest martha NOW!!??
Here's a stupid question-Does anyone think that FBs would have willingly signed the Contracts if They knew completely that they had no bankruptcy recourse ,and would be expected to pay the loan or A-go to jail,or B-wage garnishee,or both?????? Maybe Dopes would have ,but most others would have rented wisely.

Anonymous said...

Oh, sh_t! lock the doors and start the shredders:
--------------------------------
Countrywide Ordered to Open Books
By ALLEN P. ROBERTS Jr.

Countrywide Financial Corp. was ordered Wednesday to open its books and records to assist an investigation into possible manipulation of stock option grants to executives.

The order came as part of the Louisiana Municipal Police Employees' Retirement System lawsuit filed in Delaware Chancery Court last year that accused the Calabasas lender of a “statistical correlation” between some grants and short-term stock price increases.

A judge ruled Wednesday that the company must provide access to its financial records, Bloomberg News reported.

The state of Massachusetts’ pension system also plans to file a class action lawsuit against the lender by Oct. 15 to try to recoup as much as $20 million it says was lost on the company’s stock.

The lawsuits come amid a steep drop in the price of Countrywide’s stock following amid the collapse of the housing market and the subprime lending sector. The stock has lost more than half its value since hitting a 52-week high of $45.26 in April.

Shares of Countrywide were down 21 cents to $20.08 in afternoon trading on the New York Stock Exchange.