I mentioned that I hoped the individuals responsible for the deceptions at Fannie Mae would face criminal charges. It is, after all, an $11 billion accounting scandal. Maybe it will happen, according to the New York Times.
"Paul R. Berger, an associate director of enforcement at the S.E.C., said that ‘… should the commission bring actions against individuals, one of the remedies it could seek is the disgorgement of ill-gotten gains.’"
Pretty vague language, but it’s a start. As for Fannie Mae’s fine, $50 million goes to the government and $350 million goes to "a harmed shareholder’s fund."
It seems a small punishment for "executives who deliberately and intentionally manipulated earnings to increase their bonuses and a frequently conflicted board that largely stood by." The current chief executive, Daniel H. Mudd, apparently heard employee complaints about the accounting when he was chief operating officer, but "did not adequately follow them up." Said Mudd, "I absolutely wish I had handled it differently."
Yeah, right. Raise your hand if you believe that. There's no accounting for some people.
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» More, Um, Errors In Accounting Showing Up At Fannie Mae from CoreCharacter
"The image of Fannie Mae as one of the lowest-risk and 'best-in-class' institutions was a façade," said James B. Lockhart, acting director, OFHEO. "Our examination found an environment where the ends justified the means. Senior m... [Read More]
Tracked on: June 5, 2006 7:36 AM | Permalink to Trackback