Analyst: Fannie May Stop Reporting Earnings

Embroiled in an explosive accounting scandal, Fannie Mae may stop reporting its earnings, predicted one stock analyst who follows the company.Analyst Mike McMahon, in a research note released Tuesday morning, said, "it's conceivable that [Fannie] may soon have to stop reporting its earnings if it is required to restate the past six years." Last year Freddie Mac -- which was entangled in a $5 billion accounting scandal -- stopped reporting earnings as it cleaned up its books. That company, which restated past earnings upward by $5 billion over three years, is still playing catch-up and isn't yet fully current on its earnings releases. (It hopes to be so by some time next year.) It's anticipated that Fannie will have to restate earnings, but so far it is unclear by how much and when. In the same research report, Mr. McMahon foresees that management changes at Fannie are coming sooner rather than later. Industry officials predict that Fannie chief financial officer Timothy Howard, who was in charge of both setting financial targets and measuring how well they were met, will be among the first to go.