Wall Street Journal (04/21/08) P. A3; Hagerty, James R.
The Office of Federal Housing Enterprise Oversight hoped to levy fines up to $100 million and recoup $115 million in compensation when it filed an administrative-law case against three former Fannie Mae executives for their roles in the government-sponsored enterprise's accounting scandal, but observers call the settlement announced on April 18 "anticlimactic." Former Fannie Mae CEO Franklin Raines, former CFO Timothy Howard and former controller Leanne Spencer were fined $3 million; but the amount is covered by the GSE's insurance policies. The settlement also calls for Raines to give the proceeds of the sale of $2 million in Fannie Mae stock that he holds to charity, forfeit stock options and relinquish $5.3 million in other benefits. While none of the executives will serve jail time or lose a substantial amount of compensation, observers say the accounting scandal resulted in changes in mortgage lending standards that likely prevented Fannie Mae from incurring even stiffer losses due to rising mortgage defaults.
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