Three former Countrywide Financial Corp. executives who pleaded guilty to criminal insider trading charges were sentenced Monday to serve three years’ probation, the U.S. attorney’s office said.
Apparently these Countrywide crooks used confidential data showing Countrywide would not meet Wall Street earnings projections for the third quarter of 2004. They then used this “inside” information to sell off their shares, to buy put options and, eventually, to short-sell the stock, in efforts to profit from a fall in the stock’s price, prosecutors said. Put options allow an investor to sell shares at a set price within a certain time period.
Their scheme generated more than $100,000 in profits combined and all they got was probation. Way to send the message to these crooks Mr. AG. Insider trading must not be that big of a deal. I would have at least give them 90 days in county jail and give them a taste of the criminals they are.
The three men were all vice presidents working in financial planning or portfolio management for Countrywide.
Alan Cao of Woodland Hills, Quan Zhu of Santa Monica and Jun Shi of Moorpark will serve several hundred hours of community service and pay fines, said Beong-Soo Kim, an assistant U.S. attorney.
In addition, Cao was ordered to pay a fine of $4,000, while Zhu and Shi must each pay a $2,000 fine, Kim said.