Mortgage giant Freddie Mac has consented to help U.S. regulators in their probe of its former chief executive and chief financial officer, media reports said.
Former Freddie Mac CEO Leland Brendsel and former COO Vaughn Clarke will be investigated for the part they played in the company’s accounting crisis, media accounts said.
Freddie Mac, Fannie’s fellow major government-sponsored enterprise, experienced a management shakedown in 2003 when accounting irregularities surfaced. The company has since restated several past years’ earnings amounting to approximately $5 billion. And the Office of Federal Housing Enterprise Oversight fined the company $125 million.
As well as providing documents on the its former CEO and COO, Freddie Mac has also pledged to seek recovery of severance benefits and stock awards given to Brendsel and the company’s former chief financial officer, Vaughn Clarke, media accounts said.
The agreement is another step toward Freddie’s emergence from financial scandal. The company has been acting to put its accounting and other problems behind it.
The Office of Federal Housing Enterprise Oversight, regulator for Fannie Mae and Freddie Mac, has made formal agreements with the companies replacing voluntary commitments made in October 2000, OFHEO said last week.
“These agreements represent an evolution from a set of voluntary actions to a set of enforceable commitments that will be overseen by OFHEO and will operate within a predictable supervisory framework,” said OFHEO Acting Director Stephen A. Blumenthal.
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