Former Fannie Mae and Freddie Mac CEO’s Daniel Mudd and Richard Syron are being sued by the U.S. Security and Exchange Commission (SEC) for their role in vastly downplaying the volume of subprime loans the agency had procured before the housing bubble burst in 2008.
During that time Freddie Mac claimed to have secured between $2 billion and $6 billion in subprime loans, far below the $244 billion that was later discovered.
Fannie Mae CEO Daniel Mudd in the meantime claimed $4.8 billion in subprime loans when in actuality that number was closer to $50 billion.
Fannie and Freddie have both reached non-prosecution agreements with both company’s which has led the SEC to probe some of its former executives.
In a statement the SEC noted that the company’s:
“Material misstatements occurred during a time of acute investor interest in financial institutions’ exposure to subprime loans, and misled the market about the amount of risk on the company’s books.”
The SEC has also named four other executives from both company’s and in their case they ask for financial penalties,disgorgement and a ban on both executives running other company’s.
Do you think Daniel Mudd and Richard Syron should be banned from heading up other corporations given their complete incompetence in running two of America’s largest failed corporations.