BusinessBusiness RecoveryFormer Fannie CEO denies he manipulated earnings

Former Fannie CEO denies he manipulated earnings

Ex-Fannie Mae CEO Franklin Raines continues to deny accusations of earnings manipulations, blaming accounting errors

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

Read
The Washington Post story

Related Articles

Carillion CFO blew whistle over 'sloppy accounting' months before collapse

Business Recovery Carillion CFO blew whistle over 'sloppy accounting' months before collapse

3m Alia Shoaib, Reporter
Toys R Us UK and Maplin enter into administration after failing to secure buyers

Business Recovery Toys R Us UK and Maplin enter into administration after failing to secure buyers

3m Alia Shoaib, Reporter
How to avoid a Carillion collapse

Business Recovery How to avoid a Carillion collapse

4m Russell-Cooke
Carillion collapse: The week so far and industry reaction

Business Recovery Carillion collapse: The week so far and industry reaction

4m Emma Smith, Managing Editor
Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

Business Recovery Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

4m Emma Smith, Managing Editor
Carillion: PwC appointed as special managers – what happens now?

Business Recovery Carillion: PwC appointed as special managers – what happens now?

4m Emma Smith, Managing Editor
Investment firm acquires Avon Steel Company Limited

Business Recovery Investment firm acquires Avon Steel Company Limited

6m Emma Smith, Managing Editor
Manchester law firm enters into administration

Business Recovery Manchester law firm enters into administration

6m Emma Smith, Managing Editor