Freddie Mac Revamps Division
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Mortgage giant Freddie Mac said Monday that it was shutting down some operations of its debt-securities sales division and transferring others -- moves that experts said should tighten the McLean, Va.-based company’s internal controls after an accounting scandal.
The division, known as the securities sales and trading group, was responsible for some of the accounting irregularities that the government-sponsored company was cited for last year. Freddie Mac restated $4.5 billion in earnings last year, ousted top executives and was fined a record $125 million in a settlement with federal regulators.
The market-making operations of the division will be closed, and other operations involving mortgages and investments will be moved to different units of the $40-billion-a-year company, Freddie Mac said.
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