Freddie Mac appoints banking and auditing expert

Fri Jul 9, 2004

NEW YORK, July 9 (Reuters) - Freddie Mac (FRE.N: Quote, Profile, Research) , the No. 2 U.S. mortgage finance company plagued recently by accounting problems, said on Friday it has appointed Stan Martin as senior vice president and general auditor.

Martin, who has served as interim general auditor since February 2004, will report directly to the audit committee of the board, Freddie Mac said in a statement.

His appointment to the position was effective June 21.

Accounting problems at Freddie Mac came to light last year, which forced the company to restate past earnings up to 2002 by $5 billion.

Last month, the McLean, Virginia-based company released its 2003 results which showed a profit of $4.9 billion or $6.79 a share, a 52 percent fall from 2002, due to a drop in the value of derivatives it used to hedge against interest rate swings.

An independent report commissioned by the company's board said senior executives ignored accounting rules to hide earnings and to smooth earnings volatility.

 

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