Mortgage giant Fannie Mae on Monday notified the Securities and Exchange Commission it would be unable to file its quarterly report on time for the third quarter of 2004. The troubled corporation also said that it would report a $9 billion loss if the SEC determined that certain accounting practices were improper.
The quarterly report, known as Form 10Q, was due yesterday and Fannie Mae wrote in its notification that it could not file it by that due date or within the five-day extension permitted by the SEC’s rules. The inability to file the report comes as a result of ongoing investigations into the company’s accounting practices.
“Fannie Mae is not able to file a timely Form 10-Q that complies with the SEC’s rules because it has been advised by its independent auditor that it is unable to complete its review of Fannie Mae’s interim unaudited financial statements for the quarter ended Sept. 30, 2004,” according to the company’s notification of its inability to file on time (Form 12b-25).
The SEC’s rules require that such a review be completed for interim financial statements on the quarterly report. Without such a completed review, the quarterly report is considered non-compliant and untimely, the company said.
The SEC launched a formal investigation of Fannie Mae after the Office of Federal Housing Enterprise Oversight released in September a 211-page report alleging improper accounting at the company. The company also has been the target of shareholder lawsuits and a Congressional hearing.
As a required part of the Form 12b-25 notification, Fannie Mae provided anticipated results of operations. The company’s net income for the third quarter of 2004 decreased $251 million, or 9 percent, to $2.415 billion from the third quarter of 2003.
Fannie Mae reached those figures using some accounting principles that are the subject of OFHEO’s report.
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