Lawyers say Freddie Mac tried to smooth earnings

24 Jul 2003

Senior managers at Freddie Mac, the US mortgage agency, were more concerned with bolstering the company's "steady Freddie" public image than with maintaining internal controls.

That is the conclusion of law firm Baker Botts, which Freddie Mac's board commissioned to investigate its accounting practices.

The lawyers' report describes a series of actions taken by Freddie Mac in breach of established accounting practices to reduce the appearance of earnings volatility by shifting income to future periods.

Freddie's board chairman Sean O'Malley ...

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