Is Countrywide’s CEO A Sell-Out Or A Genius?

According the New York Times, Countrywide CEO Angelo Mozilo started a plan to sell tons of stock over a period just before the sub-prime markets tanked. In fact Mozilo twice raised the number of shares that could be sold: once in December 2006, when Countrywide stock was $40.50, then again in February, when it hit a high of $45.03.

Over the course of that time Mozilo made hundreds of millions from the stock sales while his company and the rest of the mortgage industry saw one of the biggest declines in history.

Of course, Mozillo didn’t have a crystal ball. I mean he didn’t know that the market was going to tank the way it did. But what he did know is that an unprecedented number of Americans were buying houses…many of whom were financing their purchases using risky interest-only and variable rate loans in order to afford them.

Now that the market is in a steep decline, Mozilo has made his millions but has also announced that he plans to lay off over 12,000 Countrywide workers.

So the question becomes, how do you classify what Mozilo did? With hindsight as our guide, was he a sell-out? Or was he a genius to have the foresight to employ smart investment strategy and see huge personal gains?

Well the treasurer of North Carolina has written the head of the SEC and asked the agency to look into the sales. “As an investor and a Countrywide shareholder, I was shocked to learn that C.E.O. Angelo Mozilo apparently manipulated his trading plans to cash in, just as the sub-prime crisis was heating up and Countrywide’s fortunes were cooling off,” Mr. Moore wrote.

How do you feel about Angelo’s move?