MARKET SCAMS

[thepennyking]

Freddie Mac Corporation
CASE INFORMATION
Summary: According to a Press Release dated June 19, 2003, the complaint was filed in Virginia federal court and alleges that Freddie Mac's securities were artificially inflated between April 18, 2000 and June 6, 2003 as a result of violations of the securities laws. During that time period, Freddie Mac's financial results were materially misstated due to its failure to properly classify hedges and assets with respect to derivative securities, and its use of 'cookie jar' accounting to create the impression that revenue and earnings were growing steadily. Moreover, Freddie Mac provided investigators with altered and misleading documents in order to conceal its improper accounting.

On June 6, 2003, Freddie Mac issued a press release, which confirmed that it would restate earnings and announced the termination of President and Chief Operating Officer, David Glenn, and the resignation of other senior officers of the company. Mr. Glenn was terminated because of 'serious questions as to the timeliness and completeness of his cooperation and candor with the Board's Audit Committee counsel.' The price of Freddie Mac common stock fell $9.61 per share to $50.26 following the announcement.

http://securities.stanford.edu/1028/FRE03-02/