Fannie Mae said it added nine new officers to its finance division as part of its reorganization plans.
The overhaul, triggered by a bevy of accounting issues, has already led to a revamp of its operations and governance, the ouster of some of its top executives, and a change of auditors.
The mortgage-finance giant, which is under investigation by the Securities and Exchange Commission and the U.S. Attorney's Office, is in the midst of a massive restatement to correct its past accounting for hedges.
The company, which plans to restate its financials from January 2001 through the second quarter of 2004, has said that doing so may reduce its earnings from 2001 to mid-2004 by $8.4 billion. Fannie Mae earlier this month delayed the filing of its first-quarter financial report with the SEC because of the time and resources being taken up by the undertaking.
Meanwhile, Fannie Mae's overseer, the Office of Federal Housing Enterprise Oversight, said the enterprise improved its capital standing in the first quarter and rated it as adequately capitalized as of March 31-- above its classification as significantly undercapitalized the prior quarter.
Eight of the new officers are in the controller's office, which includes financial controls and systems, financial reporting, accounting operations, and valuation and price verification.
"Reorganizing and strengthening our finance area is a top priority as we progress through the review, re-audit and restatement process," said Fannie Mae board member H. Patrick Swygert. "We are addressing departmental roles and responsibilities, lines of reporting, segregation of duties, and independence and alignment of functions."
"Strengthening the controller's office is another link in the chain. We are rebuilding Fannie Mae one link at a time. We will have better checks and balances, a better distribution of key responsibilities, and improved oversight and controls," interim chief executive Daniel H. Mudd said.
Gregory H. Kozich, a former PricewaterhouseCoopers lead partner, joined Fannie Mae this month as senior vice president, accounting. Former PwC lead audit engagement partner Paul A. Noring joined as senior vice president of finance. Patricia Black came aboard as vice president for financial controls from BearingPoint Inc., where she most recently served as a senior manager in the financial services consulting group.
Nigel D. Brazier took the post of vice president and business unit controller. Brazier previously was senior vice president for business development with Select Portfolio Servicing Inc. and was formerly employed with General Electric in the GE Capital Mortgage Services division.
James W. Horne took on the role of vice president for accounting systems from BearingPoint, where he was a senior manager in the financial services consulting group. He spent five years as vice president and chief information officer of the Mortgage Bankers Association, where he co-founded the Mortgage Industry Standards Maintenance Organization.
Nicholas Radesca joined Fannie Mae in March as vice president for financial reporting. Prior to joining the company, he was director for external reporting with the Del Monte Foods Co. James Kelly Ardrey jr. will join Fannie Mae as vice president for assets accounting from SunTrust, where he served as controller, and subsequently CFO, for two affiliated broker/dealers, SunTrust Capital Markets and SunTrust Securities.
R. Scott Blackley will join as senior vice president of accounting policy, reporting to the chief financial officer. Blackley joins Fannie Mae from America Online, where he was vice president of accounting policy and assistant controller. Previously, he was a partner at KPMG LLP and a professional accounting fellow in the SEC's Office of the Chief Accountant.
Mary B. Doyle, a former Fannie Mae director with responsibility for tax reporting on Fannie Mae mortgage-backed and structured securities, will rejoin Fannie Mae next month as senior vice president of financial controls and systems. Since 2002, she has been vice president of corporate accounting for Sallie Mae, where she oversaw a re-engineering of the company's loan accounting systems. She is a former senior tax partner at Andersen.
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