Freddie to Pay $125MM in OFHEO Settlement

Freddie Mac agreed Wednesday to pay a $125 million civil penalty as part of a settlement with its regulator stemming from charges that officers at the company managed earnings to the tune of $5 billion.As part of the settlement, Freddie Mac entered into a consent order and promised that it is "undertaking remedial actions relating to governance, corporate culture, accounting practices, disclosure, and oversight." However, in signing the CO, Freddie Mac noted that it made no admission regarding any wrongdoing "or any asserted implied findings." The company is still the subject of ongoing investigations by the Justice Department and the Securities and Exchange Commission, and its regulator, the Office of Federal Housing Enterprise Oversight, is not done investigating it, either. OFHEO Director Armando Falcon Jr. said a government-sponsored enterprise "lives on a public trust that should never be violated. OFHEO will take strong action against an enterprise and responsible individuals if that trust is ever broken." In trading at midday Wednesday, Freddie's stock was up slightly, to $54.46. Freddie Mac can be found online at http://www.freddiemac.com, and OFHEO can be found at http://www.ofheo.gov.