|Farmer Mac Asks NYSE to Probe Trading as Shares Fall
WASHINGTON D.C. (May 24, 2002) -- The Federal Agricultural Mortgage Corporation (Farmer Mac) (AGM) (AGMA) , the stockholder-owned instrumentality of the United States chartered by Congress to establish a secondary market for agricultural real estate and rural housing mortgage loans, announced today that it has asked the New York Stock Exchange to investigate unusual trading activity in its NYSE-listed stock, which has lost almost one-third of its value in recent weeks as a result of what the company believes are the aberrational, and possibly improper, trading activities of short sellers. In a short sale, an investor sells borrowed shares, hoping to repurchase them at a lower price to return the borrowed shares to the lender.
Jerry Oslick, General Counsel, speaking for the company, stated that over the past three weeks the company has observed inordinately high levels of short-selling in its Class C common stock, coupled with a campaign of misinformation regarding the company. Mr. Oslick emphasized that there are no developments within the company that could account for this heightened level of short-selling activity, nor for the recent loss in value of its Class C common stock. Mr. Oslick commented that the actions of certain self-admitted short sellers, which appear to have been orchestrated with recent publications of materially misleading assertions regarding the company's financial condition, demonstrated a fundamental lack of understanding of the company's business. He noted that those actions are difficult to reconcile with the full and accurate disclosures of its financial condition and results of operations that the company consistently has made in the annual, quarterly and current reports filed with the Securities and Exchange Commission since the company's creation by Congress in 1988.
Speaking more broadly, Mr. Oslick noted that the FCA does an in-depth, on- site examination of Farmer Mac on an annual basis for compliance with regulatory capital and other requirements that may affect the Company's safety and soundness, and has determined that Farmer Mac is operating in a safe and sound manner. He also reaffirmed that the company has complied fully with all of its disclosure obligations under the federal securities laws -- in fact, Farmer Mac is the only Government Sponsored Enterprise that files periodic reports with the Securities and Exchange Commission.