Freddie Mac Picks New Chairman, CEO
Freddie Mac on Sunday named former American Stock Exchange President Richard Syron chairman and chief executive as the No. 2 source of U.S. home financing tries to regain investor confidence after an accounting scandal.
Syron, 60, was serving as executive chairman of advanced technology instrument company Thermo Electron Corp., after stepping down as chief executive of that company last year. He also had been chief executive of the Federal Reserve Bank of Boston and the Federal Home Loan Bank of Boston.
He replaces Gregory Parseghian at Freddie Mac, which last month restated three years of earnings upward by $5 billion. It has delayed release of its 2003 earnings until the middle of 2004.
“We all realize there is much yet to be done to earn the full confidence of the public and all our stakeholders,” Syron said.
Freddie Mac, a government-sponsored company, replaced five senior executives in the summer -- including CEO Leland Brendsel in June -- because of accounting improprieties linked with the restatement, roiling financial markets.
Parseghian, the former chief investment officer who was the company’s choice in June to take over as CEO, was removed at the end of August under pressure from regulators because of his ties to transactions used to smooth earnings volatility.
Freddie Mac’s board consulted with the Office of Federal Housing Enterprise Oversight during the CEO search process, current Freddie Mac Chairman Shaun O’Malley said.
The company faces investigations by the Securities and Exchange Commission and a federal prosecutor in northern Virginia. Its financial soundness regulator also is expected to issue a tough report as soon as this week, possibly including financial penalties.
Also, lawmakers and the Bush administration want to tighten government oversight of Freddie Mac and its cousin government-sponsored mortgage finance enterprise, Fannie Mae. As of earlier this year, the companies together had guaranteed or financed 45% of the $7.2-trillion U.S. mortgage debt outstanding.
O’Malley said Syron had been the only person asked to take the job.
“Dick Syron has all three qualities we were looking for in a CEO: industry expertise, corporate leadership and public policy experience,” O’Malley said.
