An article in today’s New York Times states that the CEO of Freddie Mac, Richard F. Syron, was warned about the firm “financing questionable loans that threatened its financial health.”
Mr. Syron told the New York Times, “If I had better foresight, maybe I could have improved things a little bit. But frankly, if I had perfect foresight, I would never have taken this job in the first place.” The pertinent question, which the New York Times does not ask, is why Mr. Syron was even offered the job at Freddie Mac. Syron was the chairman of the American Stock Exchange (“AMEX”) from 1994 to 1999. Syron bore responsibility for trading practices that resulted in a congressional investigation into the AMEX’s failure to comply with securities laws, and resulted in SEC sanctions that required major changes at the AMEX.
The New York Times should have been aware of the issues surrounding Syron’s being hired at Freddie Mac. A New York Post article in 2003 questioned Syron’s appointment to the CEO position. The Post article mentions that while Syron was chairman of the AMEX he “strongly supported” the misconduct that later became the subject of the congressional investigation.
The congressional investigation was prompted by a 1999 Business Week article. Syron is quoted in the Business Week article defending the violative practices.
In 2000, Congressman John Dingell asked for the U.S. General Accounting Office (“GAO”) to investigate the AMEX, citing the Business Week article. The GAO reported in 2001 on changes needed at the AMEX. The GAO also reported on AMEX management failures. Mr. Syron had direct responsibility in these failures.
Research done by asensio.com played an important part in prompting the congressional investigation into practices at the AMEX. Syron’s past blunders at AMEX show the same recklessness as his current blunders at Freddie Mac. Unfortunately, some journalists seem willing to ignore the past.
To read the New York Times article, click here.
To read the New York Post article, click here.
To read the Business Week article, click here.
To read asensio.com’s report on the congressional investigation, click here.
To read the Government Accounting Office’s 2001 report to Congress on improvements needed at the AMEX, click here.