The newly appointed CEO of
rebutted allegations Monday that he sold company stock with suspiciously good timing prior to revelations of accounting misdeeds at the mortgage giant.
The comments from Gregory Parseghian came in response to a lawsuit by an institutional shareholder claiming the sales occurred while he had knowledge of the then-unpublicized accounting issues.
Saying "I have nothing to hide here," Parseghian described the stock sales as part of a diversification strategy and said the transactions in question happened shortly after the vesting of an options grant.
"On each occasion, the sale was conducted in accordance with Freddie Mac's strict trading policies and procedures and on each occasion, the sale was conducted only after consultation with Freddie Mac's legal division," he said in a statement. "Each of my trades in Freddie Mac stock has been in full compliance with the law and I am confident that any legal proceeding will reach the same conclusion."
Parseghian didn't specifically address the prior-knowledge question in the statement. He noted his employment contract with Freddie called for single, lump-sum stock and options grants, reflecting his "long-term commitment" to the company and his shareholders.
"On Feb. 1, 2001, on the very first day after the lump sum vesting of the stock/options grant from the 1996 agreement, I initiated an orderly sale of the 1996 stock and options, which took place over the next few business days," Parseghian said. "I believed this to be a prudent strategy to diversify my financial position -- especially given that I had already entered into the new 2000 agreement, which closely ties my financial fortunes to Freddie Mac's stock for a considerable period of time into the future."
He said the same strategy was pursued when another grant vested in June 2002.
Parseghian was named chief executive in June after the ouster of former CEO Leland Brendsel. A subsequent internal probe found that Parseghian was at least aware of many of Freddie's questionable accounting decisions, most of which involved the book of derivatives it uses to hedge its huge mortgage bond portfolio.