Wednesday, November 7, 2007

Former Freddie Mac CEO Settles Dispute With OFHEO

The Government reached a settlement with Leland Brendsel, former CEO of Freddie Mac, who was involved in the mortgage giant’s accounting scandal back in 2003. Brendsel will have to pay a total of $16.5 million in fines and other costs, including giving back some of his salary and bonuses. The money will be used to assist homeowners facing foreclosure. Brendsel was ousted in 2003, when he was accused of creating a corporate culture that allowed earnings misstatements of $5 billion between 2000 and 2002. Four other former Freddie Mac executives settled charges by paying civil fines and restitution. In the future, Freddie Mac cannot hire Brendsel again without the permission of the Office of Federal Housing Enterprise Oversight (OFHEO). According to Kevin Downey, the former CEO’s attorney, Brendsel and OFHEO “disagree strongly about what happened in the past at Freddie Mac”.

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