freddie mac fraud
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Freddie Mac Fraud
By: Adam Winslow
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Allegations
Civil Fraud Charges
Misstated earnings by around $5 billion
Negligent conduct charges
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Who was involved?
President and Chief Operating Officer David Glenn
Ex-chief Financial Officer Vaugh Clarke
Senior Vice Presidents Robert Dean
Senior Vice President Nazir Dossani.
All former now
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The result?
Freddie Mac- $50 million fine
Clarke- $29,227 fine
Glenn- a $250,000 civil fine, and $150,000 in restitution.
Dean- $34,658 in restitution, and a $65,000 fine.
Dossarni- $75,000 fine and $61,663 in restitution.
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How it affected business?
Brought new regulations to be followed
Couldn’t straighten out the books
No one wanted to invest
A factor in the housing crash
No trust
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Why it’s wrong?
Misstated earnings by around $5 billion
Mislead investors
Took advantage of investors
Illegal
Can’t judge the value of company
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Additional Information
Freddie Mac were created by Congress
Made to make mortgages affordable
Stimulates economy
Buys blocks of home loans from lenders
Make securities for sale to investors worldwide
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Sources
"Freddie Mac settles accounting-fraud charges - Business - US ..." 2011. 29 Nov. 2012 http://www.msnbc.msn.com/id/21027918/ns/business-us_business/t/freddie-mac-settles-accounting-fraud-charges/
"Freddie Mac's Scandal and the SEC's Judgment." 2007. 3 Dec. 2012 http://accounting.smartpros.com/x59491.xml
"Freddie Mac Profit Declined 52% in 2003 - New York Times." 2009. 30 Nov. 2012 <http://www.nytimes.com/2004/07/01/business/freddie-mac-profit-declined-52-in-2003.html>