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CNN Live At Daybreak
Freddie Mac Probe Into Accounting Widens
Aired June 12, 2003 - 06:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Time for a little business buzz right now though. Federal prosecutors want to know if a mortgage finance giant is guilty of bad bookkeeping.
Let's go live to New York and Susan Lisovicz.
It doesn't look very good, does it?
SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT: Not right now, I'm afraid, Carol. Freddie Mac's legal problems are getting worse. The nation's second largest mortgage finance company now the subject of a criminal investigation by federal prosecutors, that coming down from the U.S. attorney's office in Virginia. In addition, U.S. securities regulators have opened a formal probe into the company's accounting practices. The SEC had been carrying out an informal probe since January.
Freddie Mac says it's cooperating fully with the probe. This comes only two days after Freddie Mac ousted three top executives because of earnings restatements going back to 2000. And that news shook up Wall Street, accounting for the biggest one-day decline in 15 years for Freddie Mac's stock. And the anger continues. Freddie Mac shares falling another $1.50 yesterday to close at 50.
Back to you -- Carol.
COSTELLO: Well despite that rather depressing news, will investors keep up the buying after yesterday's impressive gains, because there were impressive gains yesterday.
LISOVICZ: They sure were, the three major indices, Carol, soaring to their highest levels of the year. And right now futures say that we will have a solid open.
The Federal Reserve yesterday released a report showing some continued weakness in the economy, but that didn't really bother investors. The Dow added 1.4 percent, or 128 points, climbing above 9,100 for the first time since July of last year. The Nasdaq gained 1.1 percent, or 18 points, to its highest close in more than a year.
In terms of what we're looking for today, we get weekly jobless claims, we get May retail sales, April business inventories, May wholesale prices and earnings from Oracle after the bell -- Carol.
COSTELLO: Great.
LISOVICZ: Quite a bit. COSTELLO: You know AOL even went up yesterday.
LISOVICZ: How about that. That's a broad-based rally.
COSTELLO: Yes, we like that. Thank you -- Susan.
LISOVICZ: Sure.
COSTELLO: We appreciate it. We'll get back to you in the next half hour.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired June 12, 2003 - 06:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Time for a little business buzz right now though. Federal prosecutors want to know if a mortgage finance giant is guilty of bad bookkeeping.
Let's go live to New York and Susan Lisovicz.
It doesn't look very good, does it?
SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT: Not right now, I'm afraid, Carol. Freddie Mac's legal problems are getting worse. The nation's second largest mortgage finance company now the subject of a criminal investigation by federal prosecutors, that coming down from the U.S. attorney's office in Virginia. In addition, U.S. securities regulators have opened a formal probe into the company's accounting practices. The SEC had been carrying out an informal probe since January.
Freddie Mac says it's cooperating fully with the probe. This comes only two days after Freddie Mac ousted three top executives because of earnings restatements going back to 2000. And that news shook up Wall Street, accounting for the biggest one-day decline in 15 years for Freddie Mac's stock. And the anger continues. Freddie Mac shares falling another $1.50 yesterday to close at 50.
Back to you -- Carol.
COSTELLO: Well despite that rather depressing news, will investors keep up the buying after yesterday's impressive gains, because there were impressive gains yesterday.
LISOVICZ: They sure were, the three major indices, Carol, soaring to their highest levels of the year. And right now futures say that we will have a solid open.
The Federal Reserve yesterday released a report showing some continued weakness in the economy, but that didn't really bother investors. The Dow added 1.4 percent, or 128 points, climbing above 9,100 for the first time since July of last year. The Nasdaq gained 1.1 percent, or 18 points, to its highest close in more than a year.
In terms of what we're looking for today, we get weekly jobless claims, we get May retail sales, April business inventories, May wholesale prices and earnings from Oracle after the bell -- Carol.
COSTELLO: Great.
LISOVICZ: Quite a bit. COSTELLO: You know AOL even went up yesterday.
LISOVICZ: How about that. That's a broad-based rally.
COSTELLO: Yes, we like that. Thank you -- Susan.
LISOVICZ: Sure.
COSTELLO: We appreciate it. We'll get back to you in the next half hour.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
