Fannie Audit Director Leaves Post

The Fannie Mae director in charge of the GSE's audit committee has stepped down from that position on the eve of a regulatory report on the mortgage giant's $10.8 billion accounting scandal.Audit committee chairman Thomas Gerrity will be replaced in that capacity by new board member Dennis R. Beresford, former chairman of the Financial Accounting Standards Board. Mr. Gerrity, a director since 1991, will be leaving the board by the end of the year. In a shareholder lawsuit, Mr. Gerrity and other board members -- as well as former officers and directors -- are accused of turning a blind eye to the company's accounting woes because they were involved in "mutually beneficial relationships" with the GSE and did not operate as independent directors. Fannie Mae is trying to get the lawsuit dismissed. In a statement the GSE said Mr. Gerrity feels it is "the right time" to step down. A GSE spokesman said the company is not saying anything more about Mr. Gerrity's decision to leave. On Tuesday morning the Office of Federal Housing Enterprise Oversight will release its long awaited report on Fannie's accounting scandal. Mr. Beresford served as FASB chairman from 1987 to 1997.