Ex-Fannie Mae executives agree to fines

April 19, 2008 at 8:58 AM
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NEW YORK, April 19 (UPI) -- Fannie Mae's former chief executive agreed to pay $24.7 million to settle a suit stemming from an accounting scandal that rocked the lender, officials said.

The Financial Times reported Franklin Raines has agreed to pay $2 million in fines and donate proceeds from the sale of $1.8 million of Fannie Mae stock to homeowner-assistance programs.

He must also return $5.3 million in other benefits and surrender claims to options on Fannie stock that were valued at $15.6 million when issued, the newspaper reported.

The U.S. Office of Federal Housing Enterprise Oversight also said former Fannie Mae Chief Financial Officer Timothy Howard agreed to pay $6.4 million, while Leanne Spencer, the company's controller, will pay a $275,000 fine.

In accepting the settlement, the men have not admitted to any wrongdoing. Fannie Mae is a government-sponsored lender.

The Office of Federal Housing Enterprise Oversight sued the three former executives in December 2006 to get them to pay more than $215 million in fines and other penalties. The agency alleged they had "improperly manipulated earnings to maximize their bonuses."

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