Freddie Restatement Could Hit $4.5B

Freddie Mac said Wednesday morning that earnings from previous years will be restated upward by as much as $4.5 billion.The stunning announcement came at 7 a.m. Wednesday, a few hours before Rep. Richard Baker, R-La., chairman of a House Financial Services subcommittee, was set to hold hearings on restructuring the regulatory apparatus for both Freddie Mac and Fannie Mae. Freddie Mac offered a range of $1.5 billion to $4.5 billion on the restatement, noting that the change will cover net earnings in 2000, 2001, and 2002. The company also said the restatement would affect periods prior to 2000. In announcing the restatement range, company chief executive Greg Parseghian said: "The information we are disclosing today reflects poorly on Freddie Mac's past accounting, control, and disclosure practices." Freddie Mac can be found online at http://www.freddiemac.com.