They've been working on this since January 2003. I find it hard to believe only two more weeks are needed for 'complex transactions'. After recent management shakeups, I think senior officials finally got a look at the finalized restatement and decided more time was needed to coordinate its release with the Fed Reserve and Exchange Stabilization Fund.
If they keep to this schedule, I'll bet it'll be released week of Oct 20th - very light week as far as econ reports go and after any other bad/good news is absorbed from prior weeks.
. A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
MCLEAN, Va. (Dow Jones)--After many delays, Freddie Mac plans to release its reaudited and restated financial results in November, anticipating a total increase in retained earnings of $4.5 billion or more. The mortgage-finance company had originally set a restatement deadline for the end of the month.
Freddie Mac's troubles began Jan. 22 when it announced plans to restate financial results for 2002, 2001 and possibly 2000 due to certain accounting issues involving the hedge accounting treatment of some transactions, including those under FAS 133. Further investigations showed that Freddie Mac hid more than a billion dollars in profit to smooth out earnings movements. In June, the company said lax accounting controls had led it to understate earnings by between $1.5 billion and $4.5 billion, after taxes, which translates into as much as $6.9 billion before taxes. At the time, Freddie said it couldn't provide a more specific number until its reaudit is completed.
In a news release Thursday, Freddie Mac said it is extending its Sept. 30 restatement deadline because of computer-system changes, more data processing and the timing of validation of the results. The company stressed the delay isn't a result of further accounting problems, noting that almost all of its new accounting policies have been finalized.
Martin Baumann, Freddie Mac's executive vice president for finance and chief financial officer, said Thursday the delay in the earnings restatement wasn't caused by newly discovered accounting errors.
Rather, he said, the company found in its review that computer-system changes were needed, as well as more data processing.
"We regret the need to extend our restatement deadline of Sept. 30, but our Number One priority has been - and continues to be - getting our financial statements right," Baumann said in a statement. "We cannot sacrifice the integrity of the process."
Freddie Mac reiterated that all of its accounting corrections the restatement should address fall into one of the five categories disclosed June 25: security classification, accounting for derivative instruments, asset transfers and securitizations, valuation of financial instruments, and all other corrections. The computer-system modifications the company must engage in affect the asset transfers and securitizations category.
Freddie Mac also anticipates an increase of about $4 billion in the fair value of shareholders' equity as of the end of 2002 from the end of 2001. However, the company stressed that neither this measure nor the restatement and reaudit processes are complete, so the final figures could change.
Freddie Mac's problems erupted in June when the company fired President and Chief Operating Officer David Glenn because of "serious questions about the timeliness and completeness of his cooperation and candor with the board's audit committee counsel." The company also fired two other top executives.
Freddie Mac named its former chief investment officer, Gregory J. Parseghian, to be president and chief executive, but ousted him just two months later once an internal investigation revealed Parseghian knew far more about the company's accounting irregularities than once suspected.
Freddie Mac now faces investigations by the Securities and Exchange Commission, the Justice Department, the federal multi-agency Corporate Fraud Task Force and the Office of Federal Housing Enterprise Oversight.
In New York Stock Exchange composite trading on Thursday morning, Freddie Mac was down 45 cents to $52.83 a share.
For continuously updated news from The Wall Street Journal, see WSJ.com at http://wsj.com.
(END) Dow Jones Newswires
09-25-03 1210ET- - 12 10 PM EDT 09-25-03
DJ FMR/Stakes -3:Lowers Freddie Mac Stake To 2.864% Vs 4.25% . FMR Corp. reduced its stake in Federal Home Loan Mortgage Corp. (FRE), or Freddie Mac, to 2.864% from 4.25%, according to an amended Schedule 13G released by the Securities and Exchange Commission Friday. The investor reported owning 19.7 million Freddie Mac shares, down from 29.5 million as of June 30. FMR reduced its stake in Activision Inc. (ATVI), a developer, publisher and distributor of interactive entertainment software, to 4.49% from 9.72%, according to a separate filing. The investor reported owning 3.96 million Activision shares, down from 8.56 million as of June 30. FMR raised its stake in computer maker Gateway Inc. (GTW) to 10.761% from 6.71%, according to a separate filing. It reported owning 34.9 million Gateway shares, up from 21.7 million as of June 30. (MORE) Dow Jones Newswires 10-10-03 0957ET- - 09 57 AM EDT 10-10-03