The story has a happy ending. In a jury trial against Countrywide and Bank of America, Michael Winston prevails and the jury awards him $3.8 million. For Mr. Winston, surely a man of principle, it likely not just about the money.
We applaud Michael G. Winston for his courage and tenacity; and our old friend Gretchen Morgenson for continuing to shine a light on practices in American business that – while not pretty – must be exposed. Mr. Winston was hired during Countrywide’s heyday as the king of the no-document, sub-prime mortgage. They did not create the industry, but through their uber aggressive CEO Angelo R. Mozilo, they took full advantage of a milieu that not only allowed for but incentivized funding mortgages at any cost: worry about the consequences later.
The hiring of Mr. Winston was a rather strange choice for this culture of high rollers. He was a grown up. A veteran of Motorola, Lockheed and McDonnell Douglas, as reported by Ms. Morgenson, he was tasked with “grooming better managers”. As he became exposed to this culture from the inside, he began asking questions and more questions, and after thoughtful analysis recommended Countrywide “focus on customer satisfaction, on the quality of the loan portfolio and on building leaders who would focus their people on that.”
Well it turns out that Mozilo and his crew wanted a yes man, a cover from critics; not Jimmy Stewart as Mr. Smith goes to Washington. Mr. Winston rolled up his sleeves and issued a report concluding Countrywide needed to shift its culture away from short term greed and move to a model of measured sustainability.
But Mozilo and his crew ignored him, froze him out of meetings, and may—in a bizarre scene straight out of the movies—have even been behind an effort to poison Mr. Winston’s team. These Countrywide guys played hard ball.
And then the moment of truth. Mr. Winston was asked (perhaps told) to rebut a rating agency analysis of Countrywide’s corporate governance practices. Here he is 50+ years old. While he has exemplary credentials, he may not have many more opportunities, particularly if he crosses Bank of America.
Good news, honesty and courage defeat intimidation and fear. Mr. Winston says no! For that he is almost immediately fired.
But the story has a happy ending. In a jury trial against Countrywide and Bank of America, Michael Winston prevails and the jury awards him $3.8 million. For Mr. Winston, surely a man of principle, it likely not just about the money. He has followed his moral compass and prevailed.
We thank him for his service, courage and the example he creates for others. (And of course Gretchen Morgenson for highlighting the story.)