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SEC Charges Former Execs Of Fannie, Freddie
SEC Seeking Financial Penalties
Aaron Smith

To hell with WSJ’s member’s only tease.

POSTED: 10:35 am EST December 16, 2011
UPDATED: 10:37 am EST December 16, 2011

NEW YORK (CNNMoney) — The Securities and Exchange Commission charged six former executives of Fannie Mae and Freddie Mac with securities fraud on Friday for misrepresenting their holdings of high-risk mortgage loans.

The SEC is targeting three former executives of Freddie Mac, including chief executive officer Daniel Mudd, chief risk officer Enrico Dallavecchia and executive vice president of single-family mortgage business Thomas Lund.

The agency is also going after three former executives of Fannie Mae: CEO Richard Syron, executive vice president and chief business officer Patricia Cook and executive vice president for the single family guarantee business Donald Bisenius.

The SEC is seeking financial penalties against them, but did not specify an amount.

Mortgage finance giants Freddie Mac and Fannie Mae, which play a central role in the U.S. housing market by keeping the cost of mortgages lower, received the biggest federal bailout of the financial crisis.

In addition, top executives have drawn some $100 million in pay.

Wednesday, November 16, 2011 5:29 PM EST
How Much Did Previous Fannie and Freddie CEOs Make?
By Moran Zhang

Lawmakers, enraged by the lucrative pay level at Fannie Mae and Freddie Mac, moved Tuesday to slash pay for the companies' employees and suspend bonuses for their top executives. Fannie Mae CEO Michael William and Freddie Mac CEO Charles E. Haldeman Jr. argued Wednesday before a Congressional committee saying pay cuts would harm taxpayers in the long run.

According to a report produced by the House Oversight and Government Reform committee, in 2010, Haldeman received a base salary of $900,000, and took home an additional $2.3 million in bonus pay. He stands to make as much as $6 million in 2011.

Meanwhile, Williams, took home $900,000 in base pay in 2010, along with an additional $2.37 million in performance bonuses. He also may take home as much as $6 million in 2011.

The report also provided a list of compensation packages given to previous Fannie Mae and Freddie Mac CEOs during the past a decade or so. Here is the rundown:

James Johnson (Fannie Mae CEO, 1991-98) earned roughly $100 million in pay over his time at the company.
Franklin Raines (Fannie Mae CEO, 1999-05) earned more than $90 million from 1998 to 2003. Furthermore, the Office of Federal
Housing Enterprise Oversight (OFHEO) revealed in 2006 that some Fannie senior executives (including Raines and Johnson)
manipulated accounting to bolster their pay from 1998 to 2004.
Daniel Mudd (Fannie Mae CEO, 2005-08) earned $12.2 million in base pay and bonuses while heading Fannie.
Leland C. Brendsel (Freddie Mac CEO 1987-03) took home more than $28.4 million from 1993 to 2003.
Richard Syron (Freddie Mac CEO, 2003-08) earned more than $38 million in compensation while he was CEO. Syron collected $19.8 million of this pay in 2007 alone, the year before the enterprise went into conservatorship.