Looks like David Glenn, the former president at Freddie Mac ( FRE), got fired at the right time. Just days before Glenn was ousted from the nation's second-largest mortgage buyer amid allegations of misconduct and a widening accounting inquiry, his rights to 13,130 shares of restricted company stock had vested. Glenn was fired Monday as part of a top-level management shake-up, which included the resignations of two other Freddie executives. But in Glenn's case, the vesting period for the restricted shares occurred on June 5, one day after Freddie officials discovered that he allegedly altered some pages and notations in several personal diaries he kept about the company's affairs -- the event that led to his firing. Efforts to reach Glenn were unsuccessful.
Freddie's audit committee had asked Glenn to turn over the diaries as part of an inquiry into the reasons behind the company's decision to restate earnings for the past three years. The upheaval at Freddie is sending shock waves through the financial markets because Freddie and its close cousin, Fannie Mae ( FNM), are critical players in the mortgage market. The government-sponsored companies buy up mortgages issued by banks, package them and sell bonds backed by the mortgages to investors. Meanwhile, regulators at the Office of Federal Housing Enterprise Oversight, which oversees Freddie and Fannie Mae, and reportedly regulators from the Securities and Exchange Commission, are launching their own inquiries into Freddie's accounting procedures. A Freddie official said Glenn got the 13,130 shares as part of a routine stock-vesting program for top corporate executives. Of the 13,130 shares that vested, 4,228 were sold back to the company by Glenn to pay the taxes associated with the vesting process. That left him with a net total of 8,802 shares. In all, Glenn potentially walks away from Freddie with 259,599 shares of the company's stock, some of which includes a mixture of both restricted and nonrestricted shares.