Freddie Mac and several executives were charged with civil fraud for misstating earnings by $5 billion through negligent conduct. The company was fined $50 million and executives received fines from $29,227 to $250,000. The accounting fraud brought new regulations, hurt investor trust, and contributed to the housing market crash by making the company's financials unclear.

2. Allegations
Civil Fraud Charges
Misstated earnings by around $5 billion
Negligent conduct charges

3. Who was involved?
President and Chief Operating Officer David
Glenn
Ex-chief Financial Officer Vaugh Clarke
Senior Vice Presidents Robert Dean
Senior Vice President Nazir Dossani.
All former now

4. The result?
Freddie Mac- $50 million fine
Clarke- $29,227 fine
Glenn- a $250,000 civil fine, and $150,000 in
restitution.
Dean- $34,658 in restitution, and a $65,000 fine.
Dossarni- $75,000 fine and $61,663 in restitution.

5. How it affected business?
Brought new regulations to be followed
Couldn’t straighten out the books
No one wanted to invest
A factor in the housing crash
No trust

6. Why it’s wrong?
Misstated earnings by around $5 billion
Mislead investors
Took advantage of investors
Illegal
Can’t judge the value of company

7. Additional Information
Freddie Mac were created by Congress
Made to make mortgages affordable
Stimulates economy
Buys blocks of home loans from lenders
Make securities for sale to investors worldwide

8. Sources
"Freddie Mac settles accounting-fraud charges - Business -
US ..." 2011. 29 Nov. 2012
http://www.msnbc.msn.com/id/21027918/ns/business-
us_business/t/freddie-mac-settles-accounting-fraud-charges/
"Freddie Mac's Scandal and the SEC's Judgment." 2007. 3
Dec. 2012 http://accounting.smartpros.com/x59491.xml
"Freddie Mac Profit Declined 52% in 2003 - New York Times."
2009. 30 Nov. 2012
<http://www.nytimes.com/2004/07/01/business/freddie-mac-
profit-declined-52-in-2003.html>