Indict Mozilo, but indict American corporate governance too

Yesterday afternoon I was on my way to a studio to appear on CNBC's Closing Bell when I got a call from the producer telling me that at 4 pm the SEC would announce an indictment of former Countrywide CEO Angelo Mozilo on an insider trading rap. While I am not sure the SEC has a solid case, I believe there's a better case to be made against the corporate governance principles that enabled Mozilo to make so much money selling Countrywide stock.

The SEC alleged that Mozilo made $140 million in personal profit selling Countrywide stock which he promoted publicly even as Mozilo's emails called many of its loans "poison." (I'd imagine that Mozilo's lawyers will use Countrywide's 2006 10K, which clearly shows rising delinquencies among its 'non-prime' mortgages to suggest that it was disclosing its problems -- including a 36 percent increase in its provision for credit losses.)