At Least 9 Fired (So Far) in Freddie Scandal

At least nine employees at Freddie Mac have been fired by the company in the wake of its earnings restatement scandal, a source at the company has confirmed to MortgageWire.Four of those let go include chairman and chief executive Leland Brendsel, president David Glenn, chief financial officer Vaughn Clarke, and Gregory Reynolds, a former comptroller who last year moved over to the business side of the company. (Technically, Mr. Brendsel retired and Mr. Vaughn resigned.) Freddie declined to provide MW with the names of the other five employees. Mr. Reynolds, who could not be reached for comment, is mentioned in the new internal "Doty Report" on the accounting scandal. His name appears in regard to the accounting for loan-loss reserves and how the company might have made adjustments to these reserves to meet the earnings expectations of Wall Street analysts. According to the report, Mr. Reynolds told investigators that if "corporate accounting had a legitimate reason," adjustments to reserves could be made, but he "conceded that the rationale for these adjustments often was not very well documented." However, the report adds that "no evidence of an adjustment of this nature that exceeded $37 million" was found and that on no occasion did these adjustments move earnings "more than five cents a share."