Knives out at Freddie Mac in row over financial reporting
Tuesday 10 June 2003
Freddie Mac, the second largest mortgage finance company in the United States, announced a major shake-up in senior management yesterday amid questions about its co-operation with an investigation into its financial reporting.
The drama at the company, which is widely traded in spite of its quasi-governmental status, rekindled worries about the quality of governance among American companies and helped trigger a decline in stocks on Wall Street after a weeks-long rally. A profit warning from Motorola also sent shares sliding.
Freddie Mac said it had dismissed David Glenn, its president and chief operating officer, "because of serious questions as to the timeliness and completeness of his co-operation and candour" with lawyers hired in January by the board of directors' audit committee to review the accounting problems.
Adding to the turmoil, the company announced the resignation of its chairman and chief executive officer, Leland Brendsel. The chief financial officer, Vaughn Clarke, was also said to be departing the mortgage giant.
Created by a charter of the US Congress in 1970 to ensure a flow of funds to mortgage lenders, Freddie Mac was originally called the Federal Home Loan Corporation. However, it was quickly given its more folksy nickname, which it formally adopted in 1997.
At the weekend, Armando Falcon, director of the Office of Federal Housing Enterprise Oversight, the federal agency that monitors Freddie Mac, wrote in a letter to the company that he had "become increasingly concerned about evidence that has come to light of weakness in controls and personnel expertise in accounting areas and the disclosure of misconduct on the part of Freddie Mac employees".
In a conference call yesterday, Freddie Mac's new chief executive officer, Gregory Parseghian, told shareholders that he saw no evidence of any criminal wrongdoing.
- 1 This 'woman calls police to order pizza' story isn't going where you're expecting
- 2 Watch what happened when food critics were unknowingly served McDonald's
- 3 Jimmy Carr's controversial Oscar Pistorius joke goes a bit too far at the Q Awards
- 4 Ottawa shootings: Bruce MacKinnon's cartoon is the perfect tribute to soldier Nathan Cirillo shot dead at war memorial
- 5 Of course, teenage girls need role models – but not like beauty vlogger Zoella
Isis releases first video showing the stoning of woman accused of committing adultery as her father shouts 'don't call me Dad'
This 'woman calls police to order pizza' story isn't going where you're expecting
FCKH8's provocative anti-sexism video showing young girls swearing reinstated by YouTube
Diwali: What is the festival of lights – and how is it celebrated around the world?
Jimmy Carr's controversial Oscar Pistorius joke goes a bit too far at the Q Awards
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Residents should throw a street party and mix with immigrant neighbours, councils told
London bus driver 'kicks gay couple off for kissing'
iJobs Money & Business
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...
£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...
120-150k: Accountancy Action: We are looking for an experienced CFO from a min...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...