Industry News

Former Countrywide execs plead guilty to insider trading

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Three former Countrywide Financial Corp. executives have pleaded guilty to insider trading, admitting they made about $103,000 selling shares they owned and short-selling company stock based on their advance knowledge that the company would miss analysts' expectations for the third quarter of 2004. Entering guilty pleas were Alan Cao, 38, of Woodland Hills, Calif., who was Countrywide's vice president of financial planning; Quan Zhu, 43, of Santa Monica, Calif., formerly Countrywide's executive vice president of portfolio risk management; and Jun Shi, 43, of Moorpark, Calif., who was the first vice president of planning at Countrywide Bank, a wholly owned subsidiary of Countrywide Financial. In October 2004, prosecutors said, Cao learned the Countrywide's earnings per share for the third quarter of 2004 would be 7 cents lower than projections made by Wall Street analysts -- information he shared with Shi and Zhu in several telephone calls. The three admitted selling Countrywide stock t...