Mozilo gets monkeyed with

North Carolina State Treasurer Richard Moore is bugging the SEC to look into Countrywide's chairman, Angelo Mozilo's stock sales. He netted over $132 million by dumping stock in a pre-arranged plan. Moore believes Mozila messed with the plan so he could cash out of his stock at a quicker pace before the proverbial doodoo hit the fan.

Mr. Moore should just look at page 103 of CFC's lastest 10Q, and ask one question. Why was CFC propping up their stock in May by purchasing 21,507,817 shares of stock at an average price of $40.39?

CFC spent $869 million buying back stock in May, but they only bought back 1,494 shares in June, when CFC didn't have to sell $4.5 billion of convertible debentures like they did in May. CFC had this to say on May 9th when they reported their April operational results and were selling the debentures:

"Strong year-over-year improvement in all other business lines rounded out the month."

Contrast this with the statement in April, when CFC reported their quarter and gave "fictitious" earnings guidance of $3.50- $4.30 for 2007, when they spoke rather soberly. Here it is.

“Countrywide’s earnings for the first quarter of 2007 were $434 million, despite adverse subprime and housing market conditions,” said Angelo R. Mozilo, Chairman and Chief Executive Officer. “While the Company’s core operations delivered what was otherwise a strong quarter, earnings were impacted by charges relating to our subprime activities as well as increases to our loss reserves and related asset valuation adjustments stemming from higher delinquencies and softer housing markets.”

It appears that CFC propped up the stock in May, with it's buyback to help sell convertible debentures at favorable pricing to bring in billions of much needed cash. CFC's massive buyback sucked in Wall Street when their fundamentals were deteriorating rapidly. After they sold the debentures, they walked away from the market.

Or may wily Angelo was unaware of the impending disaster in housing, and was just fortuitous in dumping stock in his "pre-arranged" plan.

You make the call!