The Wall Street Journal writes "CtW Investment Group, a pension-fund advisory group affiliated with seven big labor unions" has sent a letter to the board of Countywide Financial (CFC) asking it to sack CEO Angelo Mozilo.
The SEC has begun to look into the pattern of Mr. Mozilo’s stock sales before the collapse of the sub-prime mortgage market and the CFC stock. The company’s business practices have been called into question in a number of quarters including a series of articles in The New York Times.
While no one seems to like Mr. Mozilo, there is a question of whether throwing him out would be "right". Obviously if the issues involving his stock sales or company policy are correct, the board will have to remove him, but none of this has been proved yet.
Although it is probably hard to believe, Mr. Mozilo’s crime may be stupidity. He may not have seen the title wave coming in sub-prime. Clearly some very smart people at America’s largest banks and investment firms missed the signs. And, they have paid for their lack of foresight by taking billions of dollars in write-offs.
Mozilo may go, but it is still not clear that he is any more responsible for Countrywide’s problems than an airline CEO is when fuel prices rise.
Douglas A. McIntyre