Source:
Washington PostFreddie Mac's Duel With Regulator: Does It Report Government's Role in Its Losses?
In its annual 10-K financial disclosure this month, Freddie Mac executives reported that carrying out the Obama administration's housing plan would cost $30 billion this year.
By Zachary A. Goldfarb
Washington Post Staff Writer
Friday, March 27, 2009; Page A01
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But when Freddie Mac's executives concluded a few weeks ago that they had to disclose that the government's management of the McLean company was undermining its profitability and would cost it tens of billions of dollars, the firm's regulator urged it not to do so, according to several sources familiar with the matter.
Freddie Mac executives refused to bend. The clash grew so severe that they threatened to go to the Securities and Exchange Commission, which oversees corporate disclosures, to secure a ruling that the regulator's request was out of line. The company's regulator backed down, the sources said
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The housing agency
asked that the cost of the program be withheld and that the firm soften language describing how government management was undercutting profitability, according to sources.
People familiar with the dispute offered different views about why the regulator sought to prevent the disclosures.
One source said the regulatory officials didn’t want to make it seem like government actions were causing big losses at the company and would require more taxpayer dollars. Another person said the officials thought that accounting rules would soon change, making the disclosure unnecessary.Read more:
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/26/AR2009032604292.html