Freddie Mac Fraud

By: Adam Winslow

Allegations

Civil Fraud Charges

Misstated earnings by around $5 billion

Negligent conduct charges

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

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.

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

Why it’s wrong?

Misstated earnings by around $5 billion

Mislead investors

Took advantage of investors

Illegal

Can’t judge the value of company

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

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>