GSEs (Fannie/Freddie),FHA&HUD

Former GSE Exec Issued Wells Notice as Lawmakers Plan Wind-Down

Posted on Thursday, March 17, 2011

Daniel Mudd, former CEO of Fannie Mae, received a Wells notice from the Securities and Exchange Commission (SEC) last week, regarding his service with the GSE.
A Wells notice informs the recipient that the agency is considering legal action against him. The recipient may elect to respond to the Wells notice with arguments and evidence.
According to Bloomberg, Mudd will issue a rebuttal to the SEC.
Mudd issued a statement to Bloomberg that read, in part:
“In keeping with SEC procedures, I intend to submit a written response that will make clear why the SEC staff should not pursue any action in this matter …The disclosures and procedures that are the subject of the staff’s investigation were accurate and complete … As the executive responsible for initially registering Fannie Mae with the SEC, and having led the company through the SEC-mandated restatement, I have the highest respect for the Commission. Nevertheless, I could not disagree more with this turn of events.”
Mudd is one of several industry players to receive a Wells notice in recent months, including former Freddie Mac executive Anthony “Buddy” Piszel. Online brokerage E* Trade received a Wells notice last month regarding its purchase of securities.
On the heels of Mudd’s Wells notice comes the news that lawmakers are preparing to introduce bills to accelerate the wind-down of the GSEs.
According to the Wall Street Journal, Rep. Scott Garrett (R- New Jersey), head of the House subcommittee on capital markets, will on Tuesday unveil a series of bills aiming to gradually reduce the roles of Fannie and Freddie.
By: Joy Leopold, DS NEWS

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