Mortgage Daily

Published On: August 22, 2002
Parseghian May Be Stripped of Freddie CEO Title, WSJ Says

Executive may be assigned to lesser position

August 22, 2003

By MortgageDaily.com staff

Just a few months after his appointment, Freddie Mac is reportedly on the verge of removing its top executive.

Gregory Parseghian, who took the helm at the secondary lending giant in June, may be assigned to a lesser position, according to an article today in the Wall Street Journal. Citing sources familiar with the situation, WSJ said Freddie is under pressure from its regulator, the Office of Federal Housing Enterprise Oversight — or OFHEO — to appoint an executive less connected with the company’s accounting problems.

At a recent invitation-only dinner with Wall Street investors, Parseghian reportedly acknowledged that he was “disappointed in myself” for being such a willing, and active, participant in some of the improprieties, WSJ said. The publication attributed the comments to an unnamed person who was in attendance.

The government sponsored housing enterprise announced in July that an internal audit revealed it had misapplied generally accepted accounting principles (GAAP) in reported transactions during 2000 and 2001. Freddie is accused of managing earnings by deferring reported income through the use of complex derivatives. Following the disclosure of accounting problems, Freddie fired its top two executives, shareholders filed several lawsuits, and a criminal investigation was reportedly opened.

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