The Securities and Exchange Commission has opened an informal investigation into stock sales by Countrywide Financial Corp.'s Chief Executive, Angelo Mozilo.
The Wall Street Journal's online edition reported Wednesday that the main focus of the investigation is $131 million worth of stock the founder of the nation's largest mortgage lender sold in the first half of the year through his executive stock-sale plans.
The stock sale plans, called 10b5-1 plans, are widely used by executives to sell shares at regular pre-determined intervals. The question is whether Mozilo had insider information at the time the plan was established.
"We don't comment on communications with our regulators," Countrywide spokesman Rick Simon told the Journal.
The probe comes after North Carolina's State Treasurer sought an investigation into Mozilo's stock-selling practices last week.
Shares in Countrywide closed off 4.1 percent Wednesday and continued to fall another 2.1 percent to $17 in after-hours trading on the New York Stock Exchange.
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