Reactions to story from The New York Times

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  Is the Noose Tightening Around Countrywide?

  http://www.nakedcapitalism.com/2008/05/is-noose-tightening-a...
  115 days ago in naked capitalism · Authority: 434

  One of the reasons for Bank of America to walk from the Countrywide deal is the rising tide of legal costs and potential for sizeable damages. Admittedly, at this juncture the prevailing view is that the Charlotte bank would renegotiate the acquisition
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  Reached At His Tanning Bed, Angelo Mozilo Said He Just Wanted To Know "How That Broad Got Her Hands On My Mission Statement?"

  http://dealbreaker.com/2008/05/rejecting_the_arguments_of_co...
  114 days ago in Dealbreaker - A Wall Street Tabloid - Business News Headlines and Financial Gossip · Authority: 505

  Rejecting the arguments of Countrywide executives and directors that they were unaware of lax loan operations that led to ballooning defaults, Judge Mariana R. Pfaelzer of Federal District Court in Los Angeles ruled Tuesday that she found confidential
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  Countrywide facing shareholder lawsuit

  http://www.raincityguide.com/2008/05/14/countrywide-facing-s...
  115 days ago in Seattle Real Estate ~ Rain City Guide · Authority: 312

  Directors and officers of Countrywide Financial will have to defend themselves against shareholder accusations of insider trading and an overall failure to monitor lending practices that led to the companys collapse per the New York Times tonight.
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  Angelo Mozilo - Subprime CEO

  http://www.money-rx.com/blog/2008/06/angelo-mozilo-subprime-...
  89 days ago in Money-Rx Blog · Authority: 14

  Angelo R. Mozilo, the 69 year old Chairman and CEO of Calabasas, CA based Countrywide Financial Corp. (NYSE: CFC), the nation's biggest mortgage lender, is in the news for all the wrong reasons. As the company he founded in 1969 along with David Loeb dissappears in a buyout deal with Bank of America Corp. (NYSE:BAC), Mozilo faces a barrage of criticism about the way he mishandled the company and
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  Countrywide Derivative Litigation: Rule 10b5-1 Sales in the Spotlight Again

  http://WWW.THECORPORATECOUNSEL.NET/blog/archive/001804.html
  107 days ago in http://www.thecorporatecounsel.net/blog · Authority: 40

  May 22, 2008 Countrywide Derivative Litigation: Rule 10b5-1 Sales in the Spotlight Again Last week's ruling permitting plaintiffs to move forward on some claims in a derivative suit against Countrywide Financial Corp. received quite a bit of attention (see, e.g., this NY Times article and this Bloomberg article), but perhaps the most interesting elements of the case detailed in the order were allegations about insiders' sales of substantial amounts of Countrywide stock right around the time of a company repurchase plan and pursuant to Rule 10b5-1 plans. I blogged about reports of the SEC's interest in Countrywide CEO Angelo Mozilo's use of Rule 10b5-1 plans last Fall, and his trades under 10b5-1 plans were a topic of great interest during the hearing before the House Committee Oversight and Government Reform earlier this year. Now, with the May 14th Order of Judge Mariana Pfaelzer on the motions to dismiss for In re Countrywide Financial Corp. Derivative Litigation, much more detail about the trading activity of Countrywide insiders in advance of the company's troubles has come to light. Among the most notable allegations regarding insider sales were large trades conducted around the time of the announcement of Countrywide's stock repurchase programs in November 2006 and May 2007. The judge asks regarding these trades: "how could the Board members approve a repurchase of $2.4 billion dollars worth of stock, and nearly contemporaneously liquidate $148 million of their personal holdings just months before the stock dropped some 80-90%?" Ultimately, while noting that these trades appear to be suspicious, the judge didn't find sufficient detail in the complaint for the allegations to survive a motion to dismiss. It was a very different story when considering Mozilo's trades. Noting that Mozilo actively amended and modified his 10b5-1 plans, Judge Pfaelzer states: "Mozilo’s actions appear to defeat the very purpose of 10b5-1 plans, which were created to allow corporate insiders to 'passively' sell their stock based on triggers, such as specified dates and prices, without direct involvement…[a]ccordingly, his amendments of 10b5-1 plans at the height of the market does not support the inference 'that the sales were pre-scheduled and not suspicious.'" The judge rejected claims that inferences of scienter were mitigated by the fact that Mozilo's trades involved amounts of stock that represented only a small proportion of his substantial holdings, citing a 9th Circuit holding that “where, as here, stock sales result in a truly astronomical figure, less weight should be given to the fact that they may represent a small portion of the defendant's holdings.” Nursing Home Pension Fund, Local 144 v. Oracle Corp., 380 F.3d 1226, 1232 (9th Cir. 2004). While not discussed in the Order, it appears from Countrywide's filings that the company actually instituted a special kind of repurchase program around the time of the insiders' sales called an "accelerated share repurchase program," which usually involves a company purchasing shares of its own stock from a broker-dealer at a set price on one or more specified dates. The broker-dealer borrows the shares that are sold to the issuer and thereby puts itself in a short position, which it then covers by conducting open market purchases over time. From the disclosures, it appears that the company financed the purchase of the stock through the issuance of debt securities. One thing that makes an accelerated share repurchase program different from the usual buyback program is that companies often complete the buyback all at once or over a very short period of time, rather than entering the market over a long period of time to buy back stock at attractive prices. SEC Publishes CIFiR Subcommittee Reports for Comment Last week, the SEC published for public comment the four subcommittee reports that were presented to the Advisory Committee on Improvements to Financial Reporting at its May 2, 2008 open meeting. The Subcommittee Reports largely reflect additional considerations and comment on previously identified proposals. The "Delivering Financial Information" Subcommittee's report reflects some further consideration of issues briefly identified in the Committee's February Progress Report as issues for future consideration. For example, the Subcommittee has developed some "Preliminary Hypotheses" with respect to the use of Key Performance Indicators (KPIs), improvements to quarterly earnings release disclosure and timing and the use of executive summaries in Exchange Act periodic reports (similar to summaries found in offering documents). The Subcommittee's report outlines some suggestions and considerations that could ultimately result in Committee recommendations in these areas. In more accounting committee news, the Treasury Department’s Advisory Committee on the Auditing Profession posted a notice regarding the Committee's activities, along with a request for comment on the Committee's draft report until June 13. Sovereign Wealth Funds and Activism In this DealLawyers.com podcast, Ron Orol, Senior Writer for The Daily Deal, The Deal and TheDeal.com and author of, "Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World,"discusses sovereign wealth funds, including: - What is a "sovereign wealth fund"? - How are they working with activist investors, particularly in a post-Dubai Ports World politically charged environment? - What about sovereign wealth fund as activists themselves? - What are regulators in Washington doing regarding sovereign wealth funds? - Dave Lynn
• 

  That Other Misdirected Email

  http://www.portfolio.com/views/blogs/daily-brief/2008/05/21/...
  108 days ago in News Blog - Daily Brief - Portfolio.com · Authority: 318

  TO: xxxxx@Countrywide.Com Subject: email screw-up From: Angelo_Mozilo@countrywide.com Date: Wed, 21 May 2008 06:41:34 -0700 This is unbelievable. I'm getting grief in the media because instead of forwarding an email from some poor slob whining about his mortgage, I hit reply. Hey, big deal. At least I read it. How many CEO's do you know who read emails from their customers? Complaining customers? LOL, as the kids say. Hell, I saw somewhere that Carl Icahn doesn't even own a computer, if you can believe it. And Isn't a guy entitled to a few mistakes? Okay, so I thought the subprime thing would blow over a year ago. Shoot me. I wasn't the only one. But who does the left-wing antibusiness press and headline-chasing politician hacks go after? Me -- and only me. Yeah, the butcher's son from the Bronx who only built the biggest and best-run mortgage company in the country, that's the one who takes all the shit. Could it be the tan they're jealous of? Y'know, it's not easy to maintain, even in California. And don't get me started on that Gretchen Morgenson. Now I don't know what else to do. I sell the company to BofA, get a good deal for shareholders. I give up the $37.5 million that was due me. I go before Congress, say all the right things, and still they want to crucify me. WTF? And I tell Hank I am happy to support him publicly, but then I get these annoying calls from those Goldman Ivy-League types at Treasury pushing for more loan modifications. Modify this, pal! I say. So I am going to play golf tomorrow after I get the Rolls washed. Are you free? AngeloRelated Links The Economics of Carl Icahn Totally 80's: T. Boone and Icahn Carl Icahn's Communication Problems
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  Sub-Prime Problems Go Countrywide

  http://www.onecle.com/blog/archives/2008/05/21/sub-prime-pro...
  109 days ago in Contracts Blog · Authority: 17

  Sub-Prime Problems Go Countrywide New York Times: Judge Says Countrywide Officers Must Face Suit by Shareholders. Directors and officers of Countrywide Financial, the beleaguered mortgage lender, must answer shareholder accusations of insider trading and an overall failure to monitor lending practices that led to the company’s collapse, a federal judge in California has ruled. I’ve added Countrywide Financial Corp. contracts to the website, including the Investment Agreement between Countrywide Financial Corp. and Bank of America.
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  Judge Says Countrywide Officers Must Face Suit by Shareholders

  http://onespot.wsj.com/law/2008/05/15/199803722-judge-says-c...
  109 days ago in Law - WSJ.com: · Authority: 2

  Judge Says Countrywide Officers Must Face Suit by Shareholders Posted 5 days on New York Times Directors and officers of Countrywide, the beleaguered mortgage lender, will have to answer shareholder accusations of insider trading and a failure to monitor lending practices. (visit source article)
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  Churches across USA help with mortgage crisis - Charleston Daily Mail

  http://positivefinanceaustralia.com/2008/05/16/churches-acro...
  114 days ago in Positive Finance Australia · Authority: 8

  Churches across USA help with mortgage crisis - Charleston Daily Mail NEW YORK (AP) — The Rev. Jeffry Dillon switched from the religious to the secular on a recent Sunday morning to ask his parishioners a pointed question: “Do subprime mortgages scare you?” Then he announced that the Roman Catholic parish, not far Judge Says Countrywide Officers Must Face Suit by Shareholders - New York Times Directors and officers of Countrywide Financial , the beleaguered mortgage lender, must answer shareholder accusations of insider trading and an overall failure to monitor lending practices that led to the company’s collapse, a federal judge in US MBA Mortgage Survey Table Of Current Interest Rates - FXStreet.com Copyright 2008 Dow Jones & Company, Inc. The Dow Jones content is the property of Dow Jones or its licensors, and is protected by copyright and other intellectual property laws. If you are an individual, you agree not to store, copy, reproduce ING Groep reports 19 percent fall in 1st quarter net profit - International Herald Tribune AMSTERDAM, Netherlands : ING Groep NV reported a 19 percent fall in first quarter earnings on Wednesday, citing falling valuations of stocks, bonds and real estate. ING also wrote down the market value of some of its U.S. mortgage-related investments RBS okay for UK’s biggest rights issue - CNN LONDON, England (AP) — Shareholders in Royal Bank of Scotland Group gave approval on Wednesday for the biggest stock rights issue in British corporate history — almost $24 billion — as another British mortgage lender announced plans of its own for
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  Countrywide Shareholder Lawsuit May Proceed

  http://40yrs.blogspot.com/2008/05/countrywide-shareholder-la...
  114 days ago in 40 Years In The Desert · Authority: 14

  Gee, what makes you think that the people running the lender were more interested in lining their own pockets than running a business competently?*Directors and officers of Countrywide Financial, the beleaguered mortgage lender, must answer shareholder accusations of insider trading and an overall failure to monitor lending practices that led to the company’s collapse, a federal judge in California has ruled. Rejecting the arguments of Countrywide executives and directors that they were unaware of lax loan operations that led to ballooning defaults, Judge Mariana R. Pfaelzer of Federal District Court in Los Angeles ruled Tuesday that she found confidential witness accounts in the shareholder complaint to be credible and that they suggested “a widespread company culture that encouraged employees to push mortgages through without regard to underwriting standards.” Plaintiffs also identified “numerous red flags” that would have warned directors of increasingly risky loans made by Countrywide, according to the judge, who rejected a motion to dismiss the suit. “It defies reason, given the entirety of the allegations,” Judge Pfaelzer wrote, “that these committee members could be blind to widespread deviations from the underwriting policies and standards being committed by employees at all levels. At the same time, it does not appear that the committees took corrective action.”Hope that these folks are left completely destitute. They should spend the rest of their lives in homeless shelters and gutters. *The interesting thing about this is how many people are shocked by this. Capitalism 101 is that people act for their own benefit, but somehow the senior executives are exempt from all this?

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