LOS ANGELES (CN) - Quan Zhu, an executive vice president with Countrywide Financial Corp., sold shares and borrowed money to sell shares short and to buy put options based on inside information on the company's declining performance, the SEC claims in Federal Court.
The SEC claims Zhu, of Santa Monica, executive VP for Portfolio Risk Management, got inside information about Countrywide's declining performance on Oct. 14, 2004. In the next four days, he sold shares, bought put options and sold Countrywide shares short through his wife's account, and when the announcement was made public on Oct. 20, Countrywide share price dropped 11.5 percent in a day, the Commission says. Zhu was fired in June 2007. The SEC demands disgorgement and penalties. See complaint.
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