Blog on the Run: Reloaded

Monday, May 10, 2010 10:38 pm

More good news

Filed under: We're so screwed — Lex @ 10:38 pm

Fannie Mae had $3 billion in revenue in the first quarter — and lost $13.1 billion.

Yes, you read that right.

And remember: You’re on the hook for every dime of that.

1 Comment

  1. Let’s not forget FDR ( no not that one )whose banditry and accounting voodoo set Fannie Mae on the road to ruin. I am talking, of course, about
    Franklin Delano Raines

    But don’t worry about Mr. Raines! He came out just fine with a multi-million dollar pay package, according to his Wikipedia entry:

    “On December 21, 2004 Raines accepted what he called “early retirement” [4] from his position as CEO while U.S. Securities and Exchange Commission investigators continued to investigate alleged accounting irregularities. He is accused by The Office of Federal Housing Enterprise Oversight (OFHEO), the regulating body of Fannie Mae, of abetting widespread accounting errors, which included the shifting of losses so senior executives, such as himself, could earn large bonuses [5].

    In 2006, the OFHEO announced a suit against Raines in order to recover some or all of the $50 million in payments made to Raines based on the overstated earnings [6] initially estimated to be $9 billion but have been announced as 6.3 billion.[7].

    Civil charges were filed against Raines and two other former executives by the OFHEO in which the OFHEO sought $110 million in penalties and $115 million in returned bonuses from the three accused.[8] On April 18, 2008, the government announced a settlement with Raines together with J. Timothy Howard, Fannie’s former chief financial officer, and Leanne G. Spencer, Fannie’s former controller. The three executives agreed to pay fines totaling about $3 million, which will be paid by Fannie’s insurance policies. [ed. emphasis added] Raines also agreed to donate the proceeds from the sale of $1.8 million of his Fannie stock and to give up stock options. The stock options however have no value. Raines also gave up an estimated $5.3 million of “other benefits” said to be related to his pension and forgone bonuses.[9]

    An editorial in The Wall Street Journal called it a “paltry settlement” which allowed Raines and the other two executives to “keep the bulk of their riches.” [10] In 2003 alone, Raines’s compensation was over $20 million.[11]”

    Just a reminder….

    Comment by Fred Gregory — Monday, May 10, 2010 11:37 pm @ 11:37 pm

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