Freddie Mac, SEC settle accounting fraud charges

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[##_1L|1289511059.jpg|width="130" height="128" alt=""|_##]Giant mortgage-buyer Freddie Mac will pay a $50 million fine to securities regulators to settle charges it manipulated earnings for three years, the Securities and Exchange Commission said Thursday. Four former Freddie executives will also pay nearly $800,000 in penalties, the SEC said. Neither the company nor the executives admitted or denied the U.S. allegations. The SEC's complaint says Freddie Mac  misreported its net income in 2000, 2001 and 2002. In a press release, the SEC said the company improperly managed earnings beginning as early as 1998.

"Freddie Mac's departure from proper accounting practices was the result of a corporate culture that sought stable earnings growth at any cost," said Linda Thomsen, the SEC's enforcement director, in a statement.

The SEC said it expects to distribute the penalty money to investors.

Freddie Mac has taken a number of steps to bolster its accounting practices. On Thursday, Freddie's chief executive, Richard Syron, said the agreement resolves the last investigation related to its earnings restatement.

"This is another milestone enabling us to focus entirely on those things that are most important -- further advancing our housing mission, effectively serving our customers and building our business for the future," Syron said.

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