SEC Gives Freddie Mac A Pass On Subprime, Alt-A Exposure

The Securities and Exchange Commission (SEC) will not take an enforcement action against Freddie Mac or require the company to pay a monetary penalty in connection with the SEC's investigation into Freddie's exposure to subprime and Alt-A mortgages, Freddie announced Friday.

The agreement was announced shortly after news broke that the SEC had charged six former executives of Freddie Mac and Fannie Mae with securities fraud. The regulator alleges the former GSE brass approved of misleading statements that concealed the companies' true holdings of risky mortgages, including subprime products.

The SEC lawsuits name former Freddie Mac Chairman and CEO Richard F. Syron, former Executive Vice President and Chief Business Officer Patricia L. Cook and Donald J. Bisenius, former executive vice president for Freddie Mac's single-family guarantee business.

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