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Fannie Mae says stock will still be listed

January 30, 2006

SEC granted real estate loan giant's request


Inman News

Fannie Mae has gotten a letter from the New York Stock Exchange granting its request for continued listing of its stock, the mortgage giant said Friday.

Continued listing is subject to quarterly reviews by the NYSE and ongoing monitoring of the company's progress toward restating its financial statements and filing its periodic reports with the SEC, Fannie Mae said.

The government-sponsored enterprise has not filed financial results for 2004 and 2005 as investigations into massive accounting errors continue. Problems identified so far are expected to result in a profit restatement of as much as $11 billion.

The first of two accounting probe reports is expected this month or early February from the investigator hired by Fannie Mae, former New Hampshire Sen. Warren Rudman.

Because of the investigations and lack of financial reports, Fannie had warned the continued listing of its stock on the New York Stock Exchange was at risk.

But the Securities and Exchange Commission, in a recently posted decision dated Jan. 19, approved a NYSE proposal that allows the exchange to decide in rare circumstances that a company that has failed to file timely financial results remains suitable for continued exchange listing because of its position in the market.

A U.S. House panel will hold an oversight hearing on a report due on mortgage finance giant Fannie Mae's multibillion-dollar accounting problems, according to a letter released by the House Committee on Financial Services late Thursday.

In 2003, the Office of Federal Housing Enterprise Oversight discovered accounting irregularities by Fannie Mae, setting off shareholder lawsuits and investigations by the Justice Department and the Securities and Exchange Commission. As a result, the company will have to restate earnings by as much as $11 billion.

In December 2004, Fannie Mae replaced Franklin Raines, its chairman and CEO, who announced he was taking early retirement, and Fannie Mae's chief financial officer, Timothy Howard, resigned Dec. 21.

Copyright 2006 Innam News



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