Tuesday, November 17, 2009
Where's the SEC?
"One year after the government took over and bailed out Freddie Mac, the giant mortgage company, federal regulators are blocking former employees from revealing infomation to investors who are suing the company for fraud, lawyers for shareholders say. ... Federal prosecutors in Virginia and the [SEC] are already investigating whether the company misled investors about the risks it was taking with securities backed by subprime mortgages and no-document loans. But in a battle that will surface on Friday in a federal courtroom in New York, the company and its primary government overseer, the Federal Housing Finance Agency [FHFA], are trying to enforce secrecy agreements that scores of former employees signed as a condition for receiving severance payments when they left the company. ... But, barring a court order, the former employees are prohibited from cooperating with anyone in a civil lawsuit against Freddie Mac", my emphasis, Edmund Andrews at the NYT, 23 October 2009, link: http://www.nytimes.com/2009/10/23/business/23mortgage.html.
Well Mary Schapiro? What are you waiting for? Why not pass an edict that no SEC registrant may make such a pact with a former employee? Who does the SEC protect anyway? What is Freddie and the FHFA trying to hide?