Secondary mortgage giant Freddie Mac has agreed to pay $410 million to settle securities class-action and shareholder derivative lawsuits stemming from accounting mistakes that led the company to restate three years of earnings. The settlement is expected to reduce first-quarter 2005 net income by approximately $220 million after tax, including the application of expected insurance proceeds, the company said in a statement Thursday. This impact is in addition to other matters affecting 2005 net income, including approximately $200 million of adjustments and corrections previously discussed in a company announcement. "Today's settlement, like the settlement announced earlier this week with the Federal Election Commission, enables this management team to resolve past issues so that we can focus squarely on meeting our important housing mission, running the business well and serving the needs of our customers," said Richard F. Syron, Freddie Mac's chairman and CEO. "We are pleased with ...
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