SEC drops the hammer on Fannie and Freddie
Bout time they started shaking things up.
Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was," said Robert Khuzami, Director of the SEC's Enforcement Division. "These material misstatements occurred during a time of acute investor interest in financial institutions' exposure to subprime loans, and misled the market about the amount of risk on the company's books. All individuals, regardless of their rank or position, will be held accountable for perpetuating half-truths or misrepresentations about matters materially important to the interest of our country's investors.""Fannie Mae and
That’s right monkeys, while it seemed like it would never happen, the SEC launched a surprise attack on Fannie and Freddie yesterday and charged their former chief execs for misleading investors about their exposure to subprime. Number one on their hitlist seems to be Fortress CEO Danny Mudd, who as president and CEO of Fannie Mae during the crisis was quoted saying that Fannie’s subprime exposure was "less 2.5 percent of our book," as well as Freddie Mac’s Richard Syron, who in a speech back in '07 was quoted saying "(Freddie) basically no subprime exposure."
Now, the SEC is seeking “financial penalties, disgorgement of ill-gotten gains with interest, permanent injunctive relief and officer and director bars” against them along with four other former execs, but whether they’ll get any of those only time will tell, I mean, it really wouldn't surprise me if the SEC would just go ahead and take another settlement again, but as Barry Ritholtz pointed out, what makes this case interesting is how Khuzami worded his statement, particularly his last sentence:
“All individuals, regardless of their rank or position, will be held accountable for perpetuating half-truths or misrepresentations about matters materially important to the interest of our country's investors.”
Could this mean that we might see Dick Fuld in jail? Blankfein in the hot seat again?
Just something to think about.
Enjoy your weekend monkeys.
i think you're being a little too optimistic if they will indict the big wigs
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