OFHEO Hits Ex-Freddie Execs With Charges

The Office of Federal Housing Enterprise Oversight on Thursday signaled its intention to file an administrative complaint against two of the company's former top officers, the first step in stripping them of almost $38 million in cash, stock, and options.A spokeswoman for OFHEO said she does not know whether an actual administrative complaint has been filed yet against former chairman and chief executive Leland Brendsel and former chief financial officer Vaughn Clarke, but said the agency anticipates filing one. In announcing its intentions, the regulator slapped Messrs. Brendsel and Clarke with $9.6 million and $3.1 million in fines and restitution, respectively. The two men are being charged by OFHEO for the alleged roles they played in underreporting the company's earnings by $5 billion. Their attorneys could not be reached for comment by MortgageWire's deadline. Among other things, OFHEO is asking that Freddie Mac fire the two retroactively for cause, a move that would strip them of millions in owed compensation. A Freddie spokeswoman said the company would comply with OFHEO's wishes to fire the two, but only if "we're given a valid order." Back in October, former Freddie Mac president David Glenn signed a consent order with OFHEO, agreeing to pay a fine of $125,000 and cooperate with investigators probing the earnings restatement scandal.