CBS Initiates One-Sided Attack on Countrywide CEO's Stock Sales
Angelo Mozilo, CEO of Countrywide (NYSE:CFC), decided to sell some of the stock he owns in the company he co-founded 40 years ago and what is now the nation's largest mortgage lender â€“ part of a prearranged measure known as a 10b5-1 trading plan.
That drew the ire of some liberal pro-union groups and CBSâ€™s Anthony Mason.
â€śWilliam Patterson is leading a shareholder revolt against Mozilo,â€ť Mason said on the October 30 â€śEvening News.â€ť â€śHis CtW pension consulting group, together with the huge union pension fund AFSCME and the state treasurer of North Carolina, are all calling for Mozilo's ouster after it was revealed he sold more than $130 million of company stock this year before the extent of Countrywide's troubles were known.â€ť
No one in the report defended Mozilo against the implied accusations of ulterior motives.
Yet, more than a year ago, CBS reported there could be a downturn in the housing market with economic implications â€“ even a recession.
â€śDespite the cooling housing market, some top economists predict the nation's economy will keep expanding, although more slowly, through the end of the year,â€ť CBS correspondent Alexis Christoforous said on the â€śCBS Evening Newsâ€ť on Sept. 17, 2006. â€śThey warn there's a one-in-four chance the economy could slip into a recession sometime next year. Others put that risk much higher.â€ť
â€śI think the odds of recession right now are probably about 50/50,â€ť Liz Anne Saunders of Charles Schwab said to Christoforous in that same broadcast.
A logical response to that gloomy report would have been to react as Mozilo did.
In fact, Mozilo made his intentions known â€“ that he would be accelerating the rate he was going to sell his stock â€“ in October 2006, one month after that CBS report. Mozilo sped up this process because of his pending December 2009 retirement, another detail CBS did not disclose.
â€śMozilo has sold company shares through prior arrangements since 2004; the pace of his sales began to quicken last October when he put a new plan into effect,â€ť an October 18 Associated Press story reported. â€śMozilo, who is 68, said recently that he did so to reduce his stake in Countrywide and diversify his personal investments in an orderly fashion in advance of his retirement, slated for December 2009.â€ť
The CEOâ€™s critics instead got the CBS spotlight this time.
CtW Investment Group is affiliated with Change to Win, a union group that attacks corporations in the name of economic and social justice. AFSCME (American Federation of State, County and Municipal Employees) is also a union, which according to its Web site is in favor of huge government spending for entitlements.
â€śWe're asking the board of directors of Countrywide to act immediately,â€ť Patterson said to â€śEvening News.â€ť
State Treasurer of North Carolina Richard Moore, also mentioned in the story, is a Democratic candidate for governor of North Carolina â€“ a significant detail not reported by CBS. Moore has been vocal in his protests against Mozilo.
Moore is also a trustee of a pension fund that holds about 500,000 shares of Countrywide stock worth about $9.6 million. â€śEvening Newsâ€ť not only failed to point out the political motivation of Mooreâ€™s protests, but his financial motivation.