EVERYTHING can seem smaller in Europe. We have “fat cats”, America has “Godzillas”. Take Angelo Mozilo, boss of the mortgage giant Countrywide Financial. He trousered $120m (£85m) last year, including gains from the exercise of stock options.

This didn’t sit well with the American Federation of State, County and Municipal Employees. A year on, the deal is looking even harder to swallow.

Reports surfaced last week that Countrywide is one of a dozen companies being informally investigated by the US Securities and Exchange Comission in connection with the collapse of the home loans market. One line of inquiry involves stock sold by Mozilo before the housing bubble popped.

Countrywide’s share price has fallen by more than 50% this year, rocked by the collapse of the subprime mortgage market. Thousands of its customers face repossession and the company is shedding 12,000 jobs.

Mozilo, who founded the company, is also on his way out. He plans to step down in 2009. Thanks to some spectacularly good timing, it should be a comfortable retirement.

Mozilo, along with many other top executives, has been selling shares in the company under a 10b5-1 plan. The plans were designed to allow executives to sell shares and avoid charges of insider trading. Executives pledge they have no insider knowledge at the time that the schemes are set up. Sales are then made automatically on prearranged dates.

But earlier this year a study by Alan Jagolinzer, assistant professor of accounting at Stanford business school, found executives using the scheme were having uncanny good luck.

Jagolinzer reported that sales under the plans tended to follow good news and also tended to preced bad news to an extent that looked systematic. “Collectively, this suggests that, on average, trading within the rule does not solely reflect uninformed diversification,” Jagolinzer put it. The study attracted the attention of a regulator, the Securities and Exchange Commission.

The plans themselves are perfectly legal. Mozilo has publicly stated that he decided to increase his share sales ahead of his retirement. But his timing is bound to attract attention.

Richard Moore, state treasurer of North Carolina, has accused Mozilo of an “abuse of shareholders” by accelerating his plans to sell Countrywide stock. He called for regulators to investigate if the timing — just a few months before massive losses on sub-prime mortgages — was more than good luck.

Since 2004, Mozilo has gained more than $300m by selling shares through a 10b5-1 plan. The pace of the sales began to increase in October 2006 when he put a new plan in place.

In December 2006, Countrywide shares were trading at $40.50 and Mozilo increased the number of shares to be sold each month to 465,000 from 350,000 by making lawful revisions to his 10b51- plans.

In February, when shares hit $45.03, the number of shares he sold each month was increased to 580,000. Countrywide shares are now worth just under $17.

Back in March, when the sub-prime problems were just beginning to spook the market, Mozilo turned up on CNBC, a financial news channel. Investors were overreacting, he said.

Countrywide and others could actually benefit from the “ugly” shakeout.

“You don’t know who is swimming naked until the tide goes out,” he said.

Well, the water level is still falling and we are sure that Mozilo will be shown to have put on an adequate costume.

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