Reuters News Service and the Associated Press are both quoting a story in the Wall Street Journal on Wednesday that Angelo Mozilo, is under an informal investigation by the Securities and Exchange Commission (SEC). People think that this is the next Enron in the works. This would NOT be a good thing for anyone associated in mortgages, lending, real estate or affiliated in any manner in real estate. This would be devastating. I kinda like what I've seen and heard from Mozilo...He walks an adventurous line with the way he acts and seems to be a real visionary. According to Reuters, Countrywide is the largest mortgage company in the country and Mozilo, its founder, is generally credited or blamed for the company's evolution from a mostly conventional lender into one where subprime products dominated.
It appears that Countrywide is not alone, and that the SEC is apparently investigating a dozen or so companies, including Countrywide, in connection with the subprime mess but, according to The Wall Street Journal article it is taking a special but informal look at Mozilo.
At issue is the sale by Mozilo of some 130 million of his company's stock in the first six months of 2007. It seems that there is a rather large loophole... ahem, provision, in the rules against insider trading that allows an insider to set up what is called a 10b51 trading plan. Such a plan, once established, allows the insider to proceed with transactions such as buying, selling, or exercising options even if he or she subsequently comes into possession of information that might impact stock prices which is not available to the public.
Let's hope that nothing happens in this investigation. I don't get even a tacit amount of fun hearing this. I love competition, and CW is the greatest of the competitors. Plus they're our number one correspondent lender. COUNTRYWIDE is great for lending. Sure they messed up as a whole during this sub-prime mess, but so did most every other lender. The issue at the moment is Angelo. Keep your fingers crossed. The fallout of this would be decimating for us....and the government would be all over all aspects of real estate regulating everything we do. We're already over regulated. Let's see how this comes down. Hopefully, this will be just a fly by with no bombs dropping. Stay tuned.
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