DCSportbikes.net  
» Help Support .NET!
DCSportbikes Premier Membership for 25$ per year. Discounts! Click here for full information.

Now available in the .NET Shop:



Get your DCSBN Gear!
» Shoutbox
Sorry, only registered users have the ability to use our real-time shoutbox to chat with other members.

Register now, it's free!
» Online Users: 552
1 members and 551 guests
fxc3700
Most users ever online was 4,519, September 2, 2015 at 03:26 AM.
Go Back   DCSportbikes.net > Non-Sportbike Forums > Non-Sportbike Chat

Reply
LinkBack Thread Tools
Unread
  (#1)
GP Champ
 
rixride's Avatar
 
Posts: 2,197
Join Date: September 27, 2002
Location: Leesburg, VA
June 11, 2003, 08:26 PM

that came to the tysons Lunch.

I knew I shouldn't have let you guys figure out the bill...

:laugh:
U.S. Opens Criminal Inquiry Into Freddie Mac

http://www.nytimes.com/2003/06/11/bu...4&partner=UNTD


Freddie Mac was notified that it is the subject of federal securities and criminal investigations today, two days after it fired its president and chief operating officer and accepted the resignations of its other two top executives.

In a one-sentence statement, the United States attorney for the Eastern District of Virginia, Paul J. McNulty, said, "The United States attorney's office has initiated an investigation involving Freddie Mac."

Mr. McNulty did not elaborate.

Separately, the Securities and Exchange Commission was reported to have begun its own investigation into the nation's second-largest buyer of home mortgages.

A spokesman for the S.E.C. declined to comment on whether the commission had initiated a formal inquiry of Freddie Mac. Calls to Freddie Mac seeking comment were not returned this afternoon.

The firing of David W. Glenn, Freddie Mac's president and chief operating officer, and the resignations of Leland C. Brendsel, the chairman and chief executive, and Vaughn Clarke, the chief financial officer, came as Freddie Mac struggled with a restatement of its earnings from 2000 through 2002.

On the advice of its new auditors, PricewaterhouseCoopers, Freddie Mac announced in January that it would restate its earnings. Initially, it said the process would be completed in May. On Monday, when the company cleared out its executive suite, it said the process would not be finished until sometime in the third quarter.

The company has said that accounting issues are not a source of concern.

But on Monday, Freddie Mac said that Mr. Glenn had altered personal business diaries that he gave to an independent counsel hired by the company audit committee to review accounting errors.

Prices of Freddie Mac's outstanding debt securities fell sharply in the immediate aftermath of the announcements about the investigations.

However, the price declines began to narrow in advance of the sale of $1 billion in five-year notes. And they were all but eliminated shortly after that, when Freddie Mac announced that on Thursday and Friday it would buy back as much as $10 billion worth of outstanding debt securities.

That buyback is a clear signal that Freddie Mac is "confident, creditworthy and very liquid," one trader of Freddie Mac notes and bonds said.

"If there were a problem, the last thing they would do would be buying back this much paper," said the trader, who insisted on anonymity. "That is about as strong a message as you can send."

The trader added that if the buyback did not have the intended effect of restoring market confidence in Freddie Mac, next week the company would probably announce additional debt repurchases.

That signal did not make its way immediately to the stock market, however.

By early afternoon, Freddie Mac's stock was down by just over $1 a share, to $50.47.

Another trader of Freddie Mac securities who has talked to people at the company said that the departures on Monday were "simply a coup."

"It's no more complicated than that," said the trader, who also insisted on anonymity. "Freddie Mac's board and the employees had wanted David Glenn fired for a very long time. When it was announced that Glenn had been fired, there was a standing ovation."

The trader added that when Greg Parseghian, the firm's chief investment officer, was named to succeed Mr. Glenn, the announcement was greeted with another standing ovation by Freddie Mac employees.

This trader added that news of the investigations, first reported in The Washington Post today, did not come as a great surprise, particularly in light of the headline-grabbing potential of a personal diary that has altered entries and missing pages.

"I don't see how the S.E.C. and the U.S. attorney could stay away from this," the trader said.


Ride your ride and be safe this season.
  Send a message via AIM to Send a message via AIM to rixride  
Reply With Quote
Unread
  (#2)
GP Champ
 
mandymae's Avatar
 
Posts: 1,865
Join Date: April 4, 2003
Location: Earth
June 12, 2003, 07:46 AM

Hey - I resemble that remark!!!

But if you think that's interesting, read on: (I want to be fired like this)

OFHEO should nix Brendselís millions
Editorial: Lax regulators get chance to quash excessive compensation
Wednesday, June 11, 2003

Inman News Features

The Office of Federal Housing Enterprise Oversight that is supposed to regulate Fannie Mae and Freddie Mac should veto former Freddie Mac CEO Leland Brendselís $24 million exit compensation.

Whether Brendsel was involved personally in Freddie Mac's dicey accounting isnít relevant to the conclusion that $24 million is not an appropriate farewell package for the man who was keeping the shop when the figures were jiggled.

The company said today that Brensel could cash in $21.1 million in grants of Freddie Mac stock. He also is slated to receive $2.36 million in salary, a $860,000 bonus for his last six months of employment and life and health insurance for the next five years.

Thatís ridiculous, even in these days of obscene executive compensation.

Granted, Brendsel had been Freddie Macís CEO since 1987. But he resigned Monday as did CFO Vaughn Clarke, whose exit compensation wasnít disclosed. The two resignations and the termination of President and COO David Glenn, who will forfeit stock grants worth $11.2 million, followed Freddie Macís disclosure that it under-reported its revenues in 2000, 2001 and 2002, presumably in a bizarre effort to meet and manage Wall Streetís quarter earnings expectations.

The Securities Exchange Commission has opened an investigation into the matter, and Rep. Michael Oxley (R-Ohio) said the House Financial Services Committee will hold hearings on Freddie Macís accounting practices.

But it was the OFHEO that was supposed to be keeping watch over Freddie Mac. Indeed, the little-known bureau of the U.S. Treasury Department has no other known function. Thus it is the OFHEO that should do the right thing and prevent these executives from walking away from an under-fire corporation with set-for-life riches.
  Send a message via AIM to  
Reply With Quote
Unread
  (#3)
GP Champ
 
Posts: 3,459
Join Date: December 29, 2002
Location: NYC UES
June 12, 2003, 10:02 PM


It's funny that when I was reading all the business cases in school 2 years ago about AOL, Freddie Mac, etc, it was pretty clear that they had interesting and generous ways of stating earings and recording revenue. I have at least a few papers that make that point.

Bottom line is that every half decent analyst knows which firms are BSing and which are overly optimistic. I just find it surprising that that stuff is making such a commotion. I guess it took a few firms to fail and bring this issue to the forefront.

Next up, Fannie Mae. Fannie Mae runs its operations similarly to Freddie Mac. I bet they have some interesting and questionable ways of recording derrivatives, options, other securities, etc.


  Send a message via AIM to  
Reply With Quote
Unread
  (#4)
Officially Addicted to Posting
 
rddy's Avatar
 
Posts: 6,622
Join Date: October 1, 2002
Location: Boston, MA area
June 13, 2003, 12:07 AM

HAHA. The guy probably ended up screwing himself out of even more money. Although I have to admit, the stock has had tremendous growth since he's been there. Something like a 1,500% increase in value since 1987. Market cap today is almost $33 billion. Hell, he should be crying like a baby for only getting $24 million. Probably would have gotten even more options if he had disclosed all the revenue, although I guess the strike price would have been higher as well. I'm constantly shocked by people's greed and how often it seems that they decide fraud is somehow OK. Apparently it happens in my industry quite often. Unfortunately, and we all suffer for it.
  Send a message via AIM to Send a message via AIM to rddy  
Reply With Quote
Unread
  (#5)
GP Champ
 
mandymae's Avatar
 
Posts: 1,865
Join Date: April 4, 2003
Location: Earth
June 13, 2003, 09:58 AM

Yeah - and I've been watching our stock sink all week! I think that it's gone down by about $14.00 as of today. Good thing I'm no where near retirement!

Yep - I'm sure that there are plenty of people at Fannie Mae and possibly Ginnie Mae who are spending even more time in the bathrooms crapping than before - to put it politely.

But on a good note - the new Pres has decided that we are going to disclose all of the same finanical information as non-GSEs. He has a really good reputation here. So I'm sure that we'll come through okay.
  Send a message via AIM to  
Reply With Quote
Unread
  (#6)
GP Champ
 
rixride's Avatar
 
Posts: 2,197
Join Date: September 27, 2002
Location: Leesburg, VA
June 13, 2003, 12:46 PM

Quote:

Yep - I'm sure that there are plenty of people at Fannie Mae and possibly Ginnie Mae who are spending even more time in the bathrooms crapping than before - to put it politely.



Ride your ride and be safe this season.
  Send a message via AIM to Send a message via AIM to rixride  
Reply With Quote
Reply


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Powered by vBadvanced CMPS v3.2.3


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
Search Engine Friendly URLs by vBSEO 3.6.0
vBulletin Skin developed by: vBStyles.com
All logos and trademarks in this site are property of their respective owner. The comments are property of their posters, all the rest © 2002-2010 by DCSportbikes.net. DCSportbikes.net is owned by End of Time Studios, LLC.