Industry News

Industry figures question board’s role in Fannie Mae problems

Last week's report may have been too soft on board

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Last Thursday, a long-awaited 2,652-page report on Fannie Mae spearheaded by former New Hampshire Sen. Warren Rudman concluded that the mortgage giant has already disclosed the accounting problems that caused its nearly $11 billion accounting scandal and former officers bear much of the blame. The report also said that needed improvements have been made or are underway and none of Fannie's current management knowingly participated in improper behavior. While this is good news – and Fannie's stock jumped in the wake of the report – some independent consultants consulted by USA Today say Fannie Mae directors were let off too easily. "In today's world, it's very, very hard to comprehend that the board didn't know anything, that they felt misled," Frank Glassner, CEO of Compensation Design Group in New York, told USA Today. Greg Taxin, CEO of the Glass-Lewis corporate-governance research firm in San Francisco, contends the directors are guilty of "tolerating a cor...