The Banksters

0x3…6f4

ERC721

In its federal court Complaint, the Commission charged that, between 1998 and 2004, Fannie Mae engaged in a financial fraud involving multiple violations of Generally Accepted Accounting Principles ("GAAP") in connection with the preparation of its annual and quarterly financial statements. These violations had the effect, among other things, of falsely portraying stable earnings growth and reduced income statement volatility, and - for year-ended 1998 - of maximizing bonuses and achieving forecasted earnings. Specifically, in its Complaint the Commission alleged that Fannie Mae failed to comply with the accounting requirements of Statement of Accounting Standards ("SFAS") 91, which requires companies to recognize loan fees, premiums and discounts as an adjustment over the life of the applicable loans. In the fourth quarter of 1998, by not recording the full adjustment required by SFAS 91, Fannie Mae understated its expenses and overstated its income by a pre-tax amount of $199 million. Management's decision to book an amount significantly less than the adjustment amount required by SFAS 91 resulted in the company not only exceeding Wall Street expectations, but also hitting the earnings per share target necessary to trigger maximum bonuses. In the periods that followed, Fannie Mae made other departures from SFAS 91, including the implementation of a SFAS 91 Policy in 2000. Fannie Mae's SFAS 91 Policy used a "precision threshold" to determine the SFAS 91 adjustment amount the company would record. There is no support for the use of a threshold in SFAS 91. Implementation of the Policy led to misstatements of SFAS 91 amortization in all periods from the fourth quarter of 2000 through the second quarter of 2004. The Commission alleges that, on at least one occasion, Fannie Mae booked income when it was within its own Policy threshold, with the effect of meeting its earnings targets.

Name

971

Owner

0xff67A86A01C7c90B0c3f3A26B65C25f432ec1751

ID#971

Rarity

MID:26%