By Mark Frauenfelder at 4:32 pm Thu, Jun 4, 2009
The SEC charged Countrywide Chief Executive Angelo Mozilo with securities fraud. He is accused of "selling his Countrywide stock for nearly $140 million in profits while knowing that Countrywide's business model was deteriorating."
Countrywide's Mozilo accused of fraud
what, no keyboard cat?
It’s a civil action, so no prizzin. Yet, anyway.
@ Nutbastart #34:
I’ll give a short answer to your long question.
What this guy did was wrong because as CEO he had a duty to keep his shareholders informed about the status of the company.
What he did was the exact opposite of that: he kept the status of the company secret from its owners for personal gain.
In any case, he knew the rules going in so I’m not gonna shed any tears for the guy.
@ Nutbastard #28:
I suppose you could always look up Securities Fraud if you find this confusing.
Time was when you could trust dried apple head sculptures in this country.
He has too much money to ever spend a day in prison.
By one application of consequential logic, these “crimes” would warrant extended prison time. For sheer brass balls if nothing else. And were the jury of his “peers?” The trial might have to be in a prison after all. At least it would be so if there were any justice left. As these acts of blatant theft prove we’ve abandoned ethics.
Fraud and insider trading are sometimes not civil complaints.
Martha Stewart was prosecuted by the Dept. of Justice. In this guy’s case, “The SEC’s civil action seeks financial penalties and the return of ill-gotten gains.” Maybe DOJ’s still working on it.
This douchebag’s company stole every dollar my aunt had in home equity through a needless refinancing that was supposed to save her money.
I think extended jail time would be a good start, but I’d also like to see a facial tattoo with something like “scam artist” or “not to be trusted” or “stole from widows”. And once we get him, it’d be great if the prosecutors could work their way down the chain of corporate ‘responsibility’ to the other people involved.
Clicking the link in the original post might shed some light as well.
Maybe he can escape justice by pleading “I haz a sad.”
@ #7 posted by rapoli
Wouldn’t fraud be a criminal complaint? I’m not a lawyer and not a fraudster… ; )
Who’s her pimp anyhow? I used to be a hooker in NYC and know that she need a new one.
I can haz reptile skin ?
From his own email :
“I strongly believe that a decade from now there will be a recognition that entrepreneurship has been driven out of the public sector”
Uh, theft is not entrepreneurship. They don’t even live in the same zip code.
I’m not at all unclear on the fact that there are indeed laws that make doing so illegal – I’m not arguing reality, sir. Reading the drug laws doesn’t afford me a rational explanation of their existence – it merely confirms that they do. As for out and out fraud, I’m not talking about that, either. From the article:
‘He is accused of “selling his Countrywide stock for nearly $140 million in profits while knowing that Countrywide’s business model was deteriorating.” ‘
I’m wondering in what way does selling stock that you are sure is going to fall constitute a crime? And don’t say – ‘it’s a crime because it’s illegal’. That’s like saying ‘I killed a guy because my bullet went through his head.’
he should also be charged with excessive spray tanning.
Insider trading laws don’t really sit right with me. Of course it’s wrong to sell something for more than it’s worth, but what happens if you want to sell your stocks and you just happen to know something bad’s going to happen?
To put it a little better, are we saying that this guy wasn’t ALLOWED to sell his stocks? If not, what good are they really?
@ Nutbastard #31:
The problem is that he sold this stock based on inside information that he kept to himself rather than disclosing to the rest of the company’s shareholders first. Since he was pretending everything was fine when he sold the stock, any money he made in that transaction was based on lies and deception that hurt anyone else who might have an interest in the company.
If you own stock in the company you run then there can be serious conflicts of interest at work unless there are regulations to help level the playing field. Laws against securities fraud are designed to make markets work by preventing people from ripping each other off.
These *ssholes got huge tax breaks from the Texas city where I live as an incentive to relocate part of the company from California.
At the time, all the Republican city leaders were bragging about how it was so much easier for Countrywide to get business done in Texas. We didn’t have all those annoying California regulations.
Now we’ve lost those jobs and the tax abatements. Way to go, d-bag city council. Is it possible those annoying regulations had a purpose?
That’s great news, he should probably be behind bars – any word on the plight of “Friends of Angelo”?
Looks like somebody opened the Ark of the Covenant…
NutBusted, I mean, bastard. You think the crime was selling the stock, it was only a crime once he acknowledged the mortgages were “toxic” in multiple emails to Countrywide employees. That is what is called pulling a “Blodgett”. And he kind of got in trouble for it too.
He looks like a cleanly shaved version of Dr. Zaius.
I suppose you can then put the “Penis Goes Where?!” caption on his photo.
As I recall, Countrywide was another one of those “they’re not going anywhere” can’t-miss Cramer picks back when.
’bout time. I had a (keeping it vague here) law-person neighbor 4 years ago in California who railed on Countrywide for ripping off old people’s life savings with it’s financing schemes. Hopefully this was the culmination of that person’s, and others, hard work exposing this db.
But everyone who runs a company owns it, or at least a chunk of it – that’s what gives them control of the company. I can’t think of anyone who runs a company but does not own any shares. Such people obviously know more about where the company is headed than the public does – which means that any financial gain these people receive from selling stock is no different than what this guy did.
What I don’t get is why someones motivation is important – If he were completely oblivious and sold his stock at exactly the same time, that would be ok, but because he is making an informed decision, that’s a crime? As long as he didn’t artificially inflate the stock beforehand, I don’t see how anyone can find anything wrong with selling stock that you are confident is about to plunge, regardless of WHY you believe so – that’s what every investor strives to do!
It seems to me that anyone running a company stands to face criminal charges for reaping ANY profit from stock, as they simply MUST know more than the average shareholder. What are they supposed to do, only sell at a loss? Publish transcripts of every word exchanged by every employee?
“The problem is that he sold this stock based on inside information that he kept to himself rather than disclosing to the rest of the company’s shareholders first.”
So if i worked for say, Apple, and i knew a new device was going to launch, if i bought stock based on that information, and didn’t inform the public (which would be a violation of my contract with Apple) I’m committing fraud? So it’s either commit fraud or violate my contract? At what point could i then legally purchase or sell ANY stock? I’m bound to know things the public doesn’t, but I’m forbidden to disclose those things. It seems to me ‘insider trading’ is ok as long as one LOSES money (which precludes any incentive to purchase the stock)
One purchases stock in ones own company because the price of that stock will be (in)directly affected by ones performance – thus creating incentive for personal excellence and passion. That’s a GOOD thing.
It seems to me this guy wouldn’t be in trouble if he’d sold his stock and the price never ended up going down, or if he’d taken a net loss, even one based on so called ‘inside information’.
The problem is you can never prove someones motivations, and it’s silly to say doing action A is illegal only if you did it for such and such a reason. Given that the burden of proof is on the State, and that we are innocent until proven guilty, I don’t see how the state could PROVE that he sold his stock for any particular reason. The bastard could have been planning to sell for weeks – there’s no way to know – and his inside information may not have had anything to do with it. Sure, it’s unlikely, but that doesn’t matter, because it cannot be proven beyond a shadow of a doubt. Which means that these laws are not fairly enforceable, which makes the laws inherently immoral, and it all boils down to thought-crime.
As Lobster put it, “To put it a little better, are we saying that this guy wasn’t ALLOWED to sell his stocks?” and to address another lobster quote, “Of course it’s wrong to sell something for more than it’s worth” – isn’t something worth exactly what someone else is willing to pay for it? so how can one sell something for more than it’s worth? it’s worth exactly what you’re able to sell it for. we all place different values on different things depending on our perception of an object’s usefulness, desirability, or whatever. that’s what makes markets exist in the first place.
Well in terms of scale what he did is ranking pretty high up there. But on the same note, what makes things like this so tolerable? CEO’s/companies do things like this all the time. The end goal is the shareholder profit and if that means firing 5, 10, 30% of your work force for “cost realignment” then so be it.
The amount of BS that is spewed by CEO’s and large companies is beyond impressive sometimes.
Holy Oompa Loompa! This guy is just crying for a little lyrical comeupance!
“What do you get when you rob from the poor?/The Feds will show your ass to the door!/Prison is not such a wonderful place/When you must face your real, true, face!
oooooh he a bad man:
In a related story, the anti-Mafia task force in Italy has arrested its 3000th mafioso in the past 12 months. Funny how they look just like him, and many are in the same line of business.
woah woah woah people. this is what i dont get – a man with millions of dollars invested in a soon-to-be failing company decides, ‘hey, this isn’t going to work out, so i should get out now’ – and that’s a crime??? What is he supposed to do, know that the company is doomed and say to himself ‘oh wow, my stocks are going to be worthless in a little while, but i’m going to leave them there anyways’
“He is accused of “selling his Countrywide stock for nearly $140 million in profits while knowing that Countrywide’s business model was deteriorating.” ”
you’d be a fool not to! if i hold stock in a company and i can tell that it’s going to go down, who would blame me for selling off my stock? you put stock in a company because you believe they will succeed – when you no longer believe that, you take your money out.
so someone please explain why selling the stock of a doomed company is and should be a crime.
Fraud and insider trading are definitely not civil complaints. Insider trading is what Martha Stewart went to jail for.
Bcsizemo, what he did didn’t maximize shareholder profit other than his own. It harmed the other shareholders.
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