| To: John Carragher who wrote (20) | 9/30/2003 5:32:53 PM | | From: KeepItSimple | | | | SEC accounces new Freddie Mac fraud investigation!!:
(the funny part is that some people will be surprised by this)
biz.yahoo.com
Reuters
SEC Investigating Freddie Mac for Fraud
Tuesday September 30, 3:28 pm ET
By Susan Cornwell
WASHINGTON (Reuters) - Securities and Exchange Commission (News - Websites) Chairman William Donaldson said on Tuesday that the commission is examining possible evidence of fraud at Freddie Mac (NYSE:FRE - News), the mortgage finance company already reeling from a recent accounting scandal.
The SEC had announced back in June that it was looking into whether Freddie Mac has violated securities laws. Donaldson spoke briefly about the ongoing investigation after he was asked about it by Republican Sen. Chuck Hagel of Nebraska during a Senate Banking Committee hearing.
He noted that Freddie Mac's regulator, the Office of Federal Housing Enterprise Oversight (OFHEO), was conducting its own investigation of accounting irregularities at Freddie Mac, and said the SEC did not have anything to do with OFHEO's investigation.
But the SEC's job was to look for fraud in the marketplace, Donaldson continued.
"What we do control, even though they (Freddie Mac) are not registered with us now, is evidences of fraud, and if there is evidence of fraud, even though they're not registered, the impact on the marketplace, we would have a role there."
"We are looking at that right now," he added. "We're in touch with them and we're in touch with any evidences of fraud that might be, or might not be."
Donaldson gave no more details on the matter.
Freddie Mac rattled markets when it replaced its top three executives in June over an accounting scandal. Six months earlier, it had announced it would restate up to three years of results to reflect higher earnings.
A Freddie Mac spokeswoman said it was not surprising that an SEC probe should include an examination of possible fraud.
"We have been meeting with them (the SEC), since actually the beginning of our restatement process, and sharing any information that they requested," said the Freddie Mac spokeswoman, Sharon McHale.
"It is no surprise that in any corporation, in the case of any major restatement, that the SEC would look into the issue of fraud, and like any other company we are subject to all the anti-fraud provisions of securities laws," she said. "We will continue to cooperate fully with the SEC as they continue their investigation."
Donaldson also said Freddie Mac has agreed to voluntary registration with the SEC. The SEC is helping the company conform with SEC registration rules, Donaldson said.
Freddie Mac has acknowledged underreporting earnings by as much as or more than $4.5 billion over three years because of accounting irregularities. An independent report commissioned by the company said executives ignored accounting rules to push earnings into the future and maintain the image of steady earnings growth. |
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| To: KeepItSimple who started this subject | 10/23/2003 2:17:12 AM | | From: KeepItSimple | | | | Treasury mulls cutting Fannie and Freddie's loan guarantees:
Look out below!
biz.yahoo.com
Treasury Says Administration Open To Ending GSE Borrowing Line
Wednesday October 22, 6:12 pm ET
By Rebecca Christie, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- If Congress wants to end Fannie Mae (NYSE:FNM - News) and Freddie Mac's (NYSE:FRE - News) ability to borrow from the Treasury, the administration is game, a top Treasury official suggested Wednesday.
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Wayne Abernathy, Treasury's assistant secretary for financial institutions, said the Bush administration isn't currently seeking to repeal Fannie Mae and Freddie Mac's ability to borrow from the government. Under current law, the Treasury Secretary can purchase up to $2.25 billion of each company's debt in times of crisis.
But Abernathy said the administration would consider ditching that provision if lawmakers desired. "If in the process of legislation, if Congress wants to take on this issue we're open to having that discussion," Abernathy said in response to a question on that score.
Abernathy's comment echoed 2000 remarks by Gary Gensler, a senior Treasury official in the Clinton administration. Gensler actively sought to eliminate the so-called Treasury line of credit, since government-sponsored enterprise securities are already required to make clear that they aren't obligations of the U.S. government.
Gensler's remarks caused a stir in financial markets that lingered for some time. Abernathy's comments Wednesday had only a little market impact.
There has been no recent movement on Capitol Hill toward abolishing the Treasury line of credit, and the GSEs have lobbied to keep it for its symbolic value. The Treasury provision is one of the elements comprising the GSEs' implicit government guarantee, as perceived by financial markets.
The Bush administration has not directly tackled Treasury's lending authority. Instead, it has focused on the need for better disclosure, and more recently it has called for a stronger regulator that has broader powers over housing-related GSEs.
Treasury officials already have opposed one legislative proposal to move GSE regulation to Treasury, saying the bill didn't add enough power to justify a move. Earlier this month, Treasury Secretary John Snow told lawmakers that a weak Treasury-led regulator could actually make things worse by strengthening the GSEs' perceived government backing.
Abernathy seconded Snow's opinion in his comments Wednesday. He also reiterated the administration's view that any GSE regulator needs to have the power to approve new product lines as well as supervise existing business.
"Otherwise, it's kind of phony," Abernathy said. "You would give the sign of being part of the Treasury Department without any of the substance."
-By Rebecca Christie, Dow Jones Newswires; 202 862 9249; rebecca.christie@dowjones.com |
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| From: KeepItSimple | 7/11/2008 1:53:07 PM | | | | | | i may be early in my calls of a company's collapse, but i'm never wrong.
i was just 4 years too early on this one.
DOWN SHE GOES. |
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| From: james-rockford | 8/21/2008 2:03:49 PM | | | | | | | FRE is one hellava trading stock!! My initial entry was too high, but I've bought and sold several times today alone. It moves so fast, if you're a trader, you gotta love the action! |
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| From: james-rockford | 8/25/2008 2:53:54 PM | | | | | | FRE debt sale very well received:
Reuters
Freddie debt sale eases concerns of nationalization
Monday August 25, 1:17 pm ET
By Al Yoon
NEW YORK (Reuters) - Ailing mortgage finance company Freddie Mac easily sold $2 billion of short-term debt on Monday, reassuring investors that it and rival Fannie Mae can fund operations without a government takeover.
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Fannie Mae (NYSE:FNM - News) shares rose 9 percent, and Freddie Mac (NYSE:FRE - News) stock gained more than 22 percent in early afternoon trading in New York. Broader markets tumbled.
An analyst said the government-sponsored enterprises (GSEs), which own or guarantee nearly half of the mortgages in the United States, were unlikely to be nationalized, which also soothed market jitters.
Investors have been dumping their stock and have pushed the shares down more than 90 percent since March on fears the housing slump will leave the two insolvent without emergency support from the government.
Freddie Mac on Monday sold $1 billion each in three- and six-month bills, with a measure of bids stronger than its sale earlier this month. Freddie Mac and Fannie Mae must routinely issue debt to refinance maturing issues that fund their combined $1.5 trillion in mortgage investments.
"The GSEs continue to have access to funding," said Rajiv Setia, a strategist at Barclays Capital in New York. If higher rates are paid for that funding, it will get passed on through higher consumer mortgage rates, however, he said.
The companies' ability to sell debt relatively cheaply is crucial not only for their existence but because they are the only large providers of money for the depressed housing market as the credit crunch sidelined banks and Wall Street investment firms.
Investors have feared that as mortgage defaults pile up and erode the two companies' capital, the U.S. Treasury would intervene, supporting their access to credit markets but leaving shareholders with nothing.
Citigroup analyst Bradley Ball, who has held a "buy" rating through turmoil surrounding the GSEs, challenged that premise.
"The recent GSE sell-off has been surprising, since the only catalyst was apparently a press report suggesting that federal officials are likely to recapitalize the GSEs soon," Ball wrote. Nationalization is unlikely, he said.
Citing an unnamed source, Barron's last week reported a government recapitalization of Fannie Mae and Freddie Mac was increasingly likely and that losses could go beyond common stock to preferred shares and subordinated debt.
Ball increased his "risk" rating on the two companies to "speculative" from "high," while keeping a "buy" on the shares. Ball slashed his target prices on Fannie Mae and Freddie Mac by more than half to $9 and $6, respectively.
In early afternoon New York trading, shares of Freddie Mac soared 23 percent to $3.45 and Fannie Mae shares climbed 9 percent to $5.46.
Ball wrote that options for Treasury Secretary Henry Paulson and the companies include an equity investment by the Treasury, a loosening of capital surplus requirements by their regulator, a sale of mortgage bonds to free up capital, or nothing until market conditions improve.
"We continue to watch market developments," Treasury spokeswoman Brookly McLaughlin, told reporters. "We continue to be in touch with the companies and their regulators and continue to stay on top of this."
The Treasury still believes that the mortgage finance giants should remain shareholder-owned, a source familiar with Treasury thinking told Reuters on Friday.
McLaughlin said that the Treasury's new GSE adviser, Morgan Stanley, was not expected to issue a formal, public report on its recommendations to the Treasury regarding its temporary backstop authority. Rather, there would be "exchanges of information" between Morgan Stanley and the Treasury through the end of Morgan's contract in January.
Yield spread premiums on the corporate "federal agency" senior debt issued by Fannie Mae and Freddie Mac increased slightly after narrowing sharply last week. Investors believe a government bailout would make the debt more like U.S. Treasury securities, and remove the risk implied by the spread.
Fannie Mae on Monday announced it would tap the debt markets for $2 billion in three- and six-month bills.
(With reporting by Julie Haviv in New York and David Lawder and Patrick Rucker in Washington; Editing by Tom Hals) |
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