The lack of fiscal control at Freddie Mac
Many investors are unclear as to why any company would understate its earnings. It's quite simple, really, and firms as diverse as Microsoft
So for a company nicknamed "Steady Freddie," the steadiness is part of the game -- it's part of what makes Freddie Mac an attractive investment. Wall Street demands it and Freddie supplies it using shady accounting, doctored diaries, and fancy swaps, asset "parking," and other tools devised by ... yup, Wall Street. I think I'm going to be sick.
A report that was released in conjunction with the restatements shows how several Wall Street banks, including CSFB
The report by Baker & Botts law firm showed how Goldman, for example, partnered with Freddie Mac in some linked swap transactions to move more than $400 million of earnings from 2001 into later years. These swaps were approved by David Parseghian at Freddie, who briefly assumed the CEO's mantle at the company until regulators figured out that he was in the deception up to his eyeballs and demanded his ouster.
Freddie Mac says that it will be able to provide its 2003 restated financials by June. Problems solved, right? I'm unconvinced. Recently Freddie and Fannie Mae
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