Freddie Mac fired president David Glenn Monday, amidst a flurry of executive rearrangements.
According to a press release, Glenn's firing was the result of the board's questioning of his "timeliness and completeness of his cooperation and candor with the Board's Audit Committee counsel."
That committee, the statement said, was formed in January of this year to "review the facts and circumstances surrounding the principal accounting errors identified during the restatement process." The statement said the committee will also review Glenn's firing.
Freddie will be restating earnings for 2002, 2001 and 2000. The company said, in this statement, that the restatement will likely "materially increase reported earnings for prior periods and materially increase the corporation's capital surplus under its regulatory minimum capital requirements as of the end of 2002."
The statement also said that the restatements would likely show "significant volatility" in the affected quarters and "relate substantially to changes in the timing of income recognition." According to the statement, "as a result, cumulative increases related to the adjustments will have offsetting effects in future periods." Freddie also predicted "increased volatility" in future earnings periods.
Gregory J. Parseghian, 42, will be replacing Glenn as president of Freddie. Parseghian will also serve as chief executive officer. Previously, he served Freddie as executive vice president-chief investment officer.
Replacing Glenn in the chief operating officer role will be Paul T. Peterson, previously the company's executive vice-president, Single Family. Peterson, 53, has been with Freddie for 14 years, the statement said.
Chief financial officer Vaughn Clarke resigned Monday as well, the statement said. He will be replaced by Martin F. Baumann, executive vice-president, Finance.
Baumann, 55, joined Freddie in March of this year, according to the statement. Previously he was a partner and deputy chairman of the World Financial Services Practice, the statement said.
"I am today assigning responsibility for our entire restatement effort to Marty Baumann, our new Chief Financial Officer, Parseghian said. "Marty's depth of experience and knowledge make him exactly the right person to get the job done."
Also, Freddie accepted the retirement of chairman and chief executive officer Leland C. Brendsel. The statement said that the company expects him to continue as chairman of the Freddie Mac Foundation.
Shaun F. O'Malley will serve as non-executive Chairman of the Board, according to the announcement. O'Malley, 67, has been on Freddie's Board since 2001 and heads the restatement process oversight committee, the statement said.