Countrywide Financial is getting some unwanted attention from both investors and the U.S. Attorney's Office, according to two reports at Rueters this afternoon. Up first, unconfirmed rumors
that the Calabasas, Calif.-based lender is the subject of a government probe:
Countrywide Financial Corp. shares fell to a two-month low and the cost to insure its debt rose Tuesday on market talk that the largest U.S. mortgage lender may be the target of a government probe related to subprime loans.
If true, it's likely the lender is somehow tied to one or many of the SEC's 12 different probes into CDO-related issues, which I blogged about earlier today
The story also addresses rumors, rampant earlier in the day, that Countrywide's headquarters were raided by the FBI -- with an FBI spokesperson soundly denying the rumor.
As if that weren't enough, the U.S. Attorney's Office said that three former veeps will plead guilty to insider trading
-- sort of a financial services industry version of the Black Sox story, with all three betting CFC shares would tank in the third quarter of 2004:
Alan Cao, Jun Shi and Quan Zhu admitted to betting Countrywide shares would fall after learning the company's results in the third quarter of 2004 would fall short of analysts' forecasts, according to the U.S. Attorney for the Central District of California.
The former executives used their inside information to bet Countrywide shares would decline in three different ways: selling stock they owned, buying "put" options, and "short-selling" Countrywide stock, prosecutors said.
With all that took place today, it's not surprising there hasn't been a comment from Countrywide's press people yet. That's a lot of bad news to digest at once (even if the civil suit for insider trading was filed in 2006).