Posted on Sunday, March 20, 2011
Former Freddie Mac executive Richard F. Syron has been added to a growing list of GSE executives who have received a Wells notice from the Securities and Exchange Commission (SEC).
Syron, former CEO of the company, received notice that the SEC is considering a suit against him.
Like former Fannie CEO Daniel Mudd, who received a Wells notice last week, Syron has a chance to defend himself against any charges the SEC brings against him.
At this point it is being reported that he has not been accused of any illegal actions.
The SEC has launched an investigation into the disclosure reports of both Fannie Mae and Freddie Mac, in an attempt to find out whether the two companies failed to disclose just how many subprime mortgages they actually had on their books.
According to the New York Times, after receiving the notice, Syron’s lawyer released a statement in his defense.
The statement read, in part: “We have made submission to the commission, which demonstrates that Mr. Syron, as C.E.O., oversaw a very rigorous and fulsome disclosure process and that the company’s disclosures were in fact wholly accurate and compete. Any proposed charges against our client are completely without merit.”
According to Mark Calabria, director of financial regulation studies at the Cato Institute, there is much debate over whether Fannie Mae and Freddie Mac helped to expand the availability of subprime mortgage credit.
A study Calabria released last week said during the height of the housing bubble, almost 40 percent of new subprime securities were purchased by Fannie Mae and Freddie Mac.
By: Joy Leopold, DS NEWS