Fannie Mae spends $1bn on restatements
US mortgage giant shells out $1bn to restate its accounts, with more work still needed
US mortgage giant Fannie Mae has restated its accounts
from 2001 through to June 2004 following its huge accounting scandal, and faces
a ‘massive task’ to continue to restate its figures following for the next two
years.
The restatement has wiped $6.3bn (£3.2bn) of profits off the company, and it
revealed the restatements work cost it a billion dollars.
The firm, which reportedly altered earnings to trigger management bonuses,
had
been heavily criticised in a report by the Office of Federal Housing
Enterprise Oversight (OFHEO) and the Securities & Exchange Commission for
its ‘unethical corporate culture’.
James B Lockhart, director of
the Office of Federal
Housing Enterprise Oversight , said of the restatement: ‘Fannie Mae
faces enormous challenges in fixing its operational and risk management systems,
in (financial controls) compliance, and in producing audited financial
statements for 2005 and 2006,’ reported AFX.
Further reading:
No criminal charges for Fannie Mae
Fannie Mae ready for restatement
Goldman Sachs drawn into Fannie Mae lawsuit