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To: Bucky Katt who wrote (12373)	6/11/2003 4:49:06 PM
From: Bucky Katt	Respond to of 48461

RE: Freddie Mac problems> Federal Prosecutors Begin Criminal Probe of Freddie A WALL STREET JOURNAL ONLINE NEWS ROUNDUP ALEXANDRIA, Va. -- Federal prosecutors announced a criminal investigation of Freddie Mac, two days after the mortgage-market giant shook up its top leadership because of accounting problems. Also Wednesday, Freddie Mac said the Securities and Exchange Commission has opened a formal inquiry into the company. Freddie Mac, one of the nation's two huge government-sponsored mortgage-finance companies, said Monday that it had dismissed its president and chief operating officer, David Glenn, because he didn't fully cooperate with an internal review of the company's books. Chairman and Chief Executive Leland Brendsel and Vaughn Clarke, the company's chief financial officer, resigned. "The U.S. attorney's office in the Eastern District of Virginia has initiated an investigation involving Freddie Mac," U.S. Attorney Paul McNulty said Wednesday, declining further comment. A spokeswoman for the office said Mr. McNulty will make a statement about the case later Wednesday. The Washington Post reported the criminal probe in its Wednesday edition. David Palombi, a spokesman for Freddie Mac, said the company wasn't aware of an investigation by the U.S. attorney. "We've been cooperating openly with our regulator, and if we're contacted by [the U.S. attorney], we'll certainly cooperate with them as well," he said. The company said that since January it has ordered full cooperation with an informal inquiry by the SEC. "We will continue to cooperate in all respects as the investigation continues," Shaun O'Malley, chairman of Freddie Mac's board of directors, said in a prepared statement.