SEC charges former Fannie Mae, Freddie Mac executives with securities fraud

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    Dec 19, 2011 4:42 PM GMT
    http://ecnandexchanges.banking-business-review.com/news/sec-charges-former-fannie-mae-freddie-mac-executives-with-securities-fraud-191211

    The Securities and Exchange Commission (SEC) has charged six former Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) executives with securities fraud.

    The Fannie Mae executives include former CEO Daniel Mudd, chief risk officer Enrico Dallavecchia, and vice president of Single Family Mortgage business, Thomas Lund while former Freddie Mac executives include chairman of the board and CEO Richard Syron, Vice president and chief business officer Patricia Cook, and vice president for the Single Family Guarantee business Donald Bisenius.

    According to SEC's allegations, the executives had intentionally approved misleading disclosures claiming that the companies had minimal holdings of higher-risk mortgage loans, including subprime loans.

    Further allegations included that the former executives had caused the federal mortgage firms to misstate their holdings of subprime mortgage loans in periodic and other filings with the Commission, public statements, investor calls, and media interviews.

    The misleading disclosures were intended to increase their market share through increased purchases of subprime and Alt-A loans, providing false assurances about the extent of exposure to high-risk loans to investors.

    SEC's Enforcement Division Director Robert Khuzami said that the misstatements had occurred at a time when there was an acute investor interest in financial institutions' exposure to subprime loans.

    "All individuals, regardless of their rank or position, will be held accountable for perpetuating half-truths or misrepresentations about matters materially important to the interest of our country's investors," Khuzami added.

    Both the companies have entered into a Non-Prosecution Agreement with SEC to accept responsibility for their conduct and not dispute, contest, or contradict the contents of an agreed-upon Statement of Facts without admitting or denying liability, SEC said.

    SEC is seeking financial penalties, disgorgement of ill-gotten gains with interest, permanent injunctive relief and officer and director bars against Mudd, Dallavecchia, Lund, Syron, Cook, and Bisenius.
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    Dec 19, 2011 5:05 PM GMT
    Good.
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    Dec 19, 2011 5:21 PM GMT
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    Dec 19, 2011 6:18 PM GMT
    Good. Now lets get the the CEOs of CountryWide and Bank of America frog marched out of their offices and we'll be heading toward some accountability.
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    Dec 19, 2011 7:54 PM GMT
    Christian73 saidGood. Now lets get the the CEOs of CountryWide and Bank of America frog marched out of their offices and we'll be heading toward some accountability.


    If they know what was good for them, they have already taken their multi-million $$ taxpayer backed golden parachutes and are lurking in Switzerland or somewhere in the Carribean.