Former Fannie CEO denies he manipulated earnings

Franklin Raines, former chief executive officer of Fannie Mae, who resigned from the company in 2004 amid controversy over its accounting irregularities, continues to deny accusations Fannie manipulated earnings to boost profits and bonuses.

Raines told The Washington Post he was 'sorry for the accounting errors' which cost shareholders more than a billion dollars to fix, leading up to his appearance before the House Oversight and Government Reform Committee tomorrow, when he and his successor, Daniel Mudd, will join Leland Brendsel and Richard Syron, former Freddie Mac CEOs, to be questioned on what brought down the mortgage giants.

The Fannie restatement in 2006 of its results between 2001 and 2003 reduced the company's earnings by $6.3bn. Raines said that, of the $90m he was said to be awarded by the government, he had lost $36m in stock options which had no value because Fannie's stock price had collapsed or he was forced to forfeit as part of an agreement with the government.

Raines said he resigned from Fannie before the company made the decisions which ultimately undermined its financial health. He said claims that he acted inappropriately to inflate earnings was untrue.

Further reading:

Johnson takes CFO post at Fannie Mae

Fannie Mae appoints third FD this year

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