Updated from 12:36 p.m. EDT

Federal regulators have ordered Freddie Mac ( FRE) to prohibit three former executives of the mortgage-finance firm from selling millions of dollars of company stock, amid a controversy over a stock sale by one of the executives just days before an accounting scandal erupted.

The government-ordered freeze could impact more than 800,000 Freddie shares with a current value of $41 million. The freeze applies to all shares the former executives have in their company-sponsored brokerage accounts at Smith Barney, the brokerage division of Citigroup ( C).

"We have instructed them to prohibit the making of any sale, transfer or otherwise disposing of these shares until such restrictions are removed," said an official with the Office of Federal Housing Enterprise Oversight, which regulates activities at Freddie and its close cousin Fannie Mae ( FNM).

The three former executives were ousted from Freddie two weeks ago in a top-level management shake-up amid a widening accounting scandal at the nation's second-biggest buyer of home mortgages. The shake-up at Freddie has sparked investigations by the Securities and Exchange Commission and federal prosecutors, as well as a call for congressional hearings.

The most recent stock-ownership records for three former executives reveal that most of the stock in question is owned by Leland Brendsel, Freddie's former chairman, and David Glenn, Freddie's former president. Brendsel owns 549,562 shares valued at $28 million, while Glenn owns 255,566 shares with a current market value of $13 million. Vaughn Clarke, Freddie's former chief financial officer, has 15,804 shares valued at $806,004.

The three executives had acquired the shares over the past several years as part of a Freddie program to compensate top managers with grants of restricted stock. The stock grants are separate from the lucrative severance packages Freddie had negotiated with the executives; the packages also are being blocked pending the outcome of the various investigations.

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