GE Funding Capital Market Services Inc. Admits to Anticompetitive Conduct by Former Traders in the Municipal Bond Investments Market and Agrees to Pay $70 Million to Federal and State Agencies

WASHINGTON – GE Funding Capital Market Services Inc. entered into an agreement with the Department of Justice to resolve the company’s role in anticompetitive activity in the municipal bond investments market and agreed to pay a total of $70 million in restitution, penalties and disgorgement to federal and state agencies, the Department of Justice announced today.

 

 As part of its agreement with the department, GE Funding admits, acknowledges and accepts responsibility for illegal, anticompetitive conduct by its former traders.  According to the non-prosecution agreement, from 1999 through 2004, certain former GE Funding traders entered into unlawful agreements to manipulate the bidding process on municipal investment and related contracts, and caused GE Funding to make payments and engage in other related activities in connection with those agreements through at least 2006.  These contracts were used to invest the proceeds of, or manage the risks associated with, bond issuances by municipalities and other public entities.

 

 “GE Funding’s former traders entered into illegal agreements to manipulate the bidding process on municipal investment contracts,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Justice Department’s Antitrust Division.  “This anticompetitive conduct harmed municipalities, as well as taxpayers.  Today’s resolution requires GE Funding to pay penalties, disgorgement and restitution to the victims of its illegal activity.  We will continue to use all the tools at our disposal to uphold our nation’s antitrust laws and ensure competition in the financial markets.”

 

Under the terms of the agreement, GE Funding agreed to pay restitution to victims of the anticompetitive conduct and to cooperate fully with the Justice Department’s Antitrust Division in its ongoing investigation into anticompetitive conduct in the municipal bond derivatives industry.  To date, the ongoing investigation has resulted in criminal charges against 18 former executives of various financial services companies and one corporation.  Nine of the 18 executives charged have pleaded guilty.   

 

The Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS) and 25 state attorneys general also entered into agreements with GE Funding requiring the payment of penalties, disgorgement of profits from the illegal conduct and payment of restitution to the victims harmed by the bid manipulation by GE Funding employees, as well as other remedial measures.

 

 As a result of GE Funding’s admission of conduct; its cooperation with the Department of Justice and other enforcement and regulatory agencies; its monetary and non-monetary commitments to the SEC, IRS and state attorneys general; and its remedial efforts to address the anticompetitive conduct, the department agreed not to prosecute GE Funding for the manipulation of bidding for municipal investment and related contracts, provided that GE Funding satisfies its ongoing obligations under the agreement.

 

 JPMorgan Chase & Co., UBS AG and Wachovia Bank N.A. also reached agreements with the Department of Justice and other federal and state agencies to resolve anticompetitive conduct in the municipal bond derivatives market.  On May 4, 2011, UBS AG agreed to pay a total of $160 million in restitution, penalties and disgorgement to federal and state agencies for its participation in the anticompetitive conduct.  On July 7, 2011, JPMorgan agreed to pay a total of $228 million in restitution, penalties and disgorgement to federal and state agencies for its role in the conduct.  On Dec. 8, 2011, Wachovia Bank agreed to pay a total of $148 million in restitution, penalties and disgorgement to federal and state agencies for its participation in the anticompetitive conduct.

 

 The department’s ongoing investigation into the municipal bonds industry is being conducted by the Antitrust Division, the FBI and the IRS-Criminal Investigation.  The department is coordinating its investigation with the SEC, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.  The department thanks the SEC, IRS and state attorneys general for their cooperation and assistance in this matter.

 

The Antitrust Division, SEC, IRS, FBI and state attorneys general are members of the Financial Fraud Enforcement Task Force.  President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.  For more information about the task force, visit Stopfraud.gov.

Treasury Department Announces Public Offering of Warrants to Purchase Common Stock of Associated Banc-Corp

WASHINGTON – The U.S. Department of the Treasury announced today that it has commenced a secondary public offering of 3,983,308 warrants to purchase the common stock of Associated Banc-Corp (the “Company”). The proceeds of this sale will provide an additional return to the American taxpayer from Treasury’s investment in the Company beyond the dividend payments it received on the related preferred stock. The offering is expected to price through a modified Dutch auction. Deutsche Bank Securities Inc. is the sole book-running manager for this offering.

 

Deutsche Bank Securities Inc., in its capacity as auction agent, has specified that the auction will commence at 8:00 a.m., Eastern Time, on November 30, 2011, and will close at 6:30 p.m., Eastern Time, on that same day (the “submission deadline”). During the auction period, potential bidders for the warrants will be able to place bids at any price (in increments of $0.05) at or above the minimum bid price of $0.50 per warrant.

 

The auction procedure, and the exercise price, expiration, and other terms of the warrants are described in the preliminary prospectus supplement referenced below.

 

The warrants are being offered pursuant to an effective shelf registration statement that has been filed by the Company with the Securities and Exchange Commission (the “SEC”). A preliminary prospectus supplement related to the offering will be filed by the Company with the SEC and will be available on the SEC’s website at http://www.sec.gov. Copies of the final prospectus supplement relating to these securities may be obtained, when available, from Deutsche Bank Securities Inc., Prospectus Department, Harborside Financial Center, 100 Plaza One, Jersey City, New Jersey 07311-3988, telephone: 1-800-503-4611, or by emailing prospectus.cpdg@db.com. Before you invest, you should read the prospectus and prospectus supplement in the registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the warrants.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Former Senior Trader at Bernard L. Madoff Investment Securities LLC Pleads Guilty to Creating Fake Trades

NEW YORK, NY—David L. Kugel, a former senior trader in the Market Making and Proprietary Trading operations of Bernard L. Madoff Investment Securities LLC (BLMIS), pleaded guilty today in Manhattan federal court to a six-count superseding information related to his conduct while employed at BLMIS, announced Preet Bharara, the U.S. Attorney for the Southern District of New York. Kugel admitted that, beginning in the early 1970s, he helped create fake, backdated trades for the purpose of defrauding BLMIS’s investment advisory (IA) clients. Kugel pleaded guilty today before U.S. District Judge Laura Taylor Swain to two counts of conspiracy, as well as substantive counts of securities fraud, falsifying books and records of a broker-dealer, falsifying books and records of an investment adviser, and bank fraud. In addition to pleading guilty, Kugel agreed to cooperate with the government in its ongoing investigation of the fraud that occurred at BLMIS.

 

According to the superseding Information, plea agreement and other documents filed in connection with the case:

 

Kugel was employed at BLMIS from 1970 through Dec. 11, 2008. Beginning in 1970, Kugel was a trader in BLMIS’s Proprietary Trading and Market Making operations. In the late 1990s, he assumed a managerial position on the trading floor and later took on the role of “trading floor compliance analyst.”

 

From the 1970s through the collapse of BLMIS, Kugel provided historical trade information to other BLMIS employees, including Annette Bongiorno and Joann Crupi, which allegedly enabled them to create fake trades. Beginning in the early 1970s, Kugel provided certain historical information to Bongiorno so that she could select particular stocks and purchase prices to be used for each IA client, in order to meet the rate of return pre-determined by Bernard Madoff for that client. The information that Kugel provided included stock names; the buy and sell dates of potential trades; as well as the historical price ranges of those stocks for the respective dates that Bongiorno could allegedly use to make a profit. Kugel’s information often mimicked trades previously executed in connection with BLMIS’s proprietary trading operation. Beginning in the early 1990s, Kugel similarly provided Crupi with historical price information to enable her to allegedly create false, backdated trades for IA clients. These false, backdated trades were used to defraud IA clients because, when included on their account statements and trade confirmations, they gave the appearance of profitable trading when none, in fact, had occurred.

In addition, Kugel, and allegedly Crupi and others, defrauded numerous banks by using false financial information to obtain loans. On multiple occasions, Kugel and allegedly Crupi, submitted false and misleading information to banks concerning Kugel’s assets and the assets of others, in order to obtain loans for the purchase and construction of homes. With the assistance of Crupi and others, Kugel obtained multiple million-dollar loans based on the submission of this fraudulent information.

 

Kugel, 66, faces a total statutory maximum sentence of 85 years in prison. A chart identifying the maximum penalties for each of the charged offenses is attached to this release. Kugel is also subject to mandatory restitution and criminal forfeiture and faces criminal fines up to twice the gross gain or loss derived from the offense. According to the agreements entered into with the government, Kugel has agreed to forfeiture of more than $170 billion, including his interests in homes, a luxury car, various accounts at financial institutions and other specific assets. The net proceeds from the sale of the forfeited property will be used to compensate victims of the fraud, consistent with applicable Department of Justice regulations.

 

Following the guilty plea, Judge Swain released Kugel on a $3 million bond on the condition that the bond be co-signed by six financially responsible individuals and secured by $900,000 in cash and property. In addition, Kugel’s travel is restricted to the Southern and Eastern Districts of New York and the District of New Jersey. He will be subject to strict pretrial supervision. Kugel has surrendered his passport.

 

Judge Swain set a sentencing date for Kugel of May 4, 2012, at 11:00 a.m.

Charges against Bongiorno and Crupi remain pending and are merely accusations. They are presumed innocent unless and until proven guilty.

 

Mr. Bharara praised the investigative work of the FBI. He also thanked the U.S. Securities and Exchange Commission for its assistance.

 

These cases were brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Lisa A. Baroni, Julian J. Moore, Arlo Devlin-Brown, Barbara A. Ward and Matthew L. Schwartz are in charge of the prosecution.

Securities and Exchange Commission Failed to Stop Bernie Madoff Fraud

November 11, Washington Post – (National) Eight SEC employees disciplined over failures in Madoff fraud case; none are fired. The Securities and Exchange Commission (SEC), which failed to stop a long-running investment fraud despite repeated warnings, has disciplined eight agency employees over their handling of the matter but did not fire anyone, reported the Washington Post. The SEC’s head of human resources and a law firm hired to advise the agency had recommended the chairman fire one person, whom the SEC described as a manager in the office that inspects investment firms. But the chairman did not fire the worker because doing so "would harm the agency’s work," a SEC spokesman said.

The Washington Post reported November 11 seven SEC employees had been disciplined, based on details provided by a person familiar with the actions. A second source, an official involved in the process, told the Post the chairman had received recommendations to fire an employee over the mishandling of the case. Later November 11, the SEC spokesman confirmed details and added that an eighth employee also received disciplinary action. A ninth employee, who was facing a 7-day suspension, resigned before disciplinary action was taken, the spokesman said.

 

The punishments given the SEC employees varied and included suspensions, pay cuts, and demotions. Although the SEC conducted five examinations and inspections of the hedge fund manager based on complaints, agency personnel "never took the necessary and basic steps to determine if [he] was misrepresenting his trading," the inspector general reported. "While examiners and investigators discovered suspicious information and evidence and caught [the manager] in contradictions and inconsistencies, they either disregarded these concerns or relied inappropriately upon [his] representations and documentation in dismissing them," the inspector general added.

 

Read more.

 

Source: Washington Post via Homeland Security Daily Open Source Infrastructure Report

Treasury Department Announces Public Offerings of Warrants to Purchase Common Stock of Suntrust Banks, Inc.

WASHINGTON -- The U.S. Department of the Treasury announced today that it has commenced a secondary public offering of 6,008,902 warrants to purchase the common stock of SunTrust Banks, Inc. (the “Company”) (the “A Warrants”) and a secondary public offering of 11,891,280 warrants to purchase the common stock of the Company (the “B Warrants”). The proceeds of this sale will provide an additional return to the American taxpayer from Treasury’s investment in the Company beyond the dividend payments it received on the related preferred stock. The offerings are expected to price through a modified Dutch auction. Deutsche Bank Securities Inc. is the sole book-running manager and Lebenthal & Co., LLC is the co-manager for the offerings.

Deutsche Bank Securities Inc., in its capacity as auction agent, has specified that the auctions will commence at 8 a.m., Eastern Time, on September 22, 2011, and will close at 6:30 p.m., Eastern Time, on that same day (the “submission deadline”). During the auction period, potential bidders for the A Warrants will be able to place bids at any price (in increments of $0.05) at or above the minimum bid price of $2.00 per warrant, and potential bidders for the B Warrants will be able to place bids at any price (in increments of $0.05) at or above the minimum bid price of $1.05 per warrant.

The auction procedures, and the applicable exercise prices, expirations, and other terms of the warrants are described in the preliminary prospectus supplements referenced below.

The warrants are being offered pursuant to an effective shelf registration statement that has been filed by the Company with the Securities and Exchange Commission (the “SEC”). Preliminary prospectus supplements related to the offerings will be filed by the Company with the SEC and will be available on the SEC’s website at http://www.sec.gov. Copies of the final prospectus supplements relating to these securities may be obtained, when available, from Deutsche Bank Securities Inc., Prospectus Department, Harborside Financial Center, 100 Plaza One, Jersey City, New Jersey 07311-3988, telephone: 1-800-503-4611, or by emailing prospectus.cpdg@db.com. Before you invest, you should read the prospectus and prospectus supplements in the registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the warrants.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Freddie Mac Prices New $5 Billion Two-Year Reference Notes® Security

MCLEAN, Va., Sept. 15, 2011 /PRNewswire/ -- Freddie Mac (OTC: FMCC) announced today that it priced its new 0.375% $5 billion two-year USD Reference Notes® security due on October 30, 2013.  The issue, CUSIP number 3137EACX5, was priced at 99.937 to yield 0.405%, or 20 basis points more than two-year U.S. Treasury Notes.  The issue will settle on Monday, September 19, 2011

The new two-year Reference Notes security was offered via a syndicate of dealers headed by J.P. Morgan Chase, Deutsche Bank Securities, Inc., and BNP Paribas Securities Corp.  An application was made to list the issue on the Euro MTF market of the Luxembourg Stock Exchange.

This announcement is not an offer to sell any Freddie Mac securities.  Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac's Annual Report on Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission ("SEC") on February 24, 2011, and all documents that Freddie Mac files with the SEC pursuant to Section 13(a), 13(c) or 14 of the Securities Exchange Act of 1934, excluding any information "furnished" to the SEC on Form 8-K.

Freddie Mac's press releases sometimes contain forward-looking statements.  A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company's Annual Report on Form 10-K for the year ended December 31, 2010 and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company's Web site at www.FreddieMac.com/investors and the SEC's Web site at www.sec.gov.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters. 

SOURCE Freddie Mac

Two Ft. Lauderdale Men Indicted for Money Laundering and Obstruction of Justice in Connection with Mutual Benefits Corporation Fraud

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), announced the unsealing of a fifty-four count indictment against defendants Henry Fecker, III, 57, and Steven Steiner, a/k/a “Steven Steinger,”59, for their participation in a scheme to launder and conceal proceeds in connection with the Mutual Benefits Corporation (“MBC”) fraud. More specifically, Fecker and Steiner are charged with receiving more than $10 million into the account of Camden Consulting, a company they controlled, and then hiding and concealing assets from the U.S. Securities and Exchange Commission (“SEC”) and the United States District Court. Both defendants were arrested and appeared in court earlier today. A pre-trial detention hearing is scheduled for Tuesday, August 30, 2011 at 1:30 p.m. before U.S. Magistrate Judge Andrea M. Simonton.

As alleged in the indictment, from approximately 1994 to May 2004, MBC purchased life insurance policies and sold them in fractionalized form to investors. MBC and its employees and agents eventually defrauded approximately 30,000 investors by, among other things, misleading them about the accuracy of life expectancies of the insureds and the expenses required to maintain the insurance policies via premium payments. New investor money was thus used to pay premiums on life insurance policies purchased by earlier investors. As the scheme continued, more investor money was required to prevent the Ponzi-scheme from collapsing. After the MBC business collapsed in 2004, investors eventually suffered more than $830 million in losses.

As charged in the indictment, Steiner was a founder and Vice President of MBC and was paid by MBC using the account of Camden Consulting. Fecker was the owner of Camden Consulting. In this way, the MBC funds were used to support a lavish lifestyle for Steiner and Fecker, who lived together and jointly owned waterfront homes in Ft. Lauderdale and Camden, Maine, and a luxury apartment in New York City.

According to the indictment, in May 2004, MBC was sued by the SEC in the civil action, S.E.C. vs. Mutual Benefits Corp., et al., No. 04-60573-CIV-MORENO (S.D. Fla.) (the “SEC Fraud Action”). The SEC obtained a restraining order to halt the alleged fraud at MBC, and thereafter a receiver was appointed by the United States District Court for the Southern District of Florida (the “MBC Receiver”), to identify and trace the assets of MBC. Steiner was a named defendant in the SEC Fraud Action and Fecker was a party due to his control of Camden Consulting.

According to the indictment, after 2004 when MBC was shut down, Fecker and Steiner engaged in a series of transactions to hide assets from the SEC and the MBC Receiver by placing funds attributable to Steiner with third parties or in Fecker’s name alone, and later by causing third parties to make payments of monies due to Steiner, instead to Fecker. In 2006, for example, Fecker obtained a refinance of the Maine property and placed the proceeds of approximately $480,000 into a series of certified checks to conceal their existence from authorities. Fecker began cashing these checks in 2008 and continued this through July 2011, using the funds to support a lavish lifestyle for Fecker and Steiner.

To obtain a favorable settlement of their liability with the SEC, the indictment alleges that in 2006 and early 2007, Fecker and Steiner submitted a series of false and misleading documents to conceal their true financial condition. Based on this documentation, around April 2007, the SEC agreed to settled their liability for $5 million and further agreed to a reduced penalty of $3.95 million, and the court in the SEC Fraud Action thereafter ordered that these sums be paid by order dated April 10, 2007. The indictment alleges that, to date, Steiner and Fecker have paid only $750,000.

The indictment further alleges in late 2009, to further conceal assets from the SEC and the SEC receiver, Steiner sold the luxury New York apartment for $1.3 million, but caused false documents to state that the sales price was $1.1 million and submitted these documents to the SEC and the MBC Receiver. To further thwart the SEC’s efforts to recover assets attributable to MBC, Steiner allegedly provided false and misleading testimony under oath to the MBC Receiver concerning his assets and financial condition.

Previously, in a separate case also in the Southern District of Florida, Steiner was charged in United States v. Joel Steinger, et al. (Case No. 08-CR-21158), with conspiracy to commit mail and wire fraud and money laundering, in relation to the MBC fraud scheme. Trial in that matter is scheduled for February 2013 before U.S. District Judge Adalberto Jordan.

United States Attorney Wifredo A. Ferrer stated, “Ponzi-schemes, like the MBC investment scheme, defraud unwitting investors out of their lives savings. These defendants compounded their legal troubles by then laundering the proceeds of the fraud and attempting to hide assets. Such abuse will not be tolerated.”

“We will vigorously investigate and prosecute individuals who obstruct justice by making false statements and concealing assets from an agency of the United States attempting to carry out its mission, such as the SEC’s efforts to protect investors here,” said FBI Special Agent in Charge John V. Gillies.

“We will hold accountable those who engage in the laundering of funds derived from fraud, particularly through concealment and spending of funds through sophisticated transactions, like the ones employed here,” said IRS Special Agent in Charge José A. Gonzalez.

Mr. Ferrer commended the investigative efforts of the FBI and the IRS-CID, and the Miami Regional Office of the SEC, which previously brought a civil action against MBC and its principals. The matter is being prosecuted by Assistant U.S. Attorney Jerrob Duffy.

An indictment is only a charging document, and a defendant is presumed innocent unless and until proven guilty.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on pacer.flsd.uscourts.gov.

Freddie Mac Will Not Issue a Reference Notes® Security in August

MCLEAN, Va., Aug. 25, 2011 /PRNewswire/ -- Freddie Mac (OTC: FMCC) announced today that it will not issue a Reference Notes® security in August.  The company's 2011 Reference Notes calendar designates dates that it may use to announce the issuance of Reference Notes securities. 

This announcement is not an offer to sell any Freddie Mac securities.  Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac's Annual Report on Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission ("SEC") on February 24, 2011, and all documents that Freddie Mac files with the SEC pursuant to Section 13(a), 13(c) or 14 of the Securities Exchange Act of 1934, excluding any information "furnished" to the SEC on Form 8-K.

Freddie Mac's press releases sometimes contain forward-looking statements.  A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company's Annual Report on Form 10-K for the year ended December 31, 2010 and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company's Web site at www.FreddieMac.com/investors and the SEC's Web site at www.sec.gov.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.  www.FreddieMac.com

SOURCE Freddie Mac

Freddie Mac Reports Second Quarter 2011 Financial Results

MCLEAN, Va., Aug. 8, 2011 -- Freddie Mac (OTC: FMCC) today reported its second quarter 2011 financial results and filed its quarterly Form 10-Q with the U.S. Securities and Exchange Commission.  The company's SEC filing and press release are available now on the company's website, www.freddiemac.com/investors, along with these related materials:

·         Second quarter 2011 financial results supplement;

·         Consolidated financial statements; and

·         Core tables, providing additional financial information about the company.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

SOURCE Freddie Mac

For further information: Media, Doug Duvall, +1-703-903-2476, or Investors, Linda Eddy, +1-571-382-4732

Commodities Trader Convicted of Threatening to Kill Government Officials

Earlier today, Vincent McCrudden, a former commodities trader, pleaded guilty to two counts of transmitting threats to kill more than 40 current and former officials of the U.S. Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), the National Futures Association (“NFA”), and the U.S. Commodities Futures Trading Commission (“CFTC”). McCrudden has been in custody since his arrest on January 14, 2011.

The guilty pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Lanny A. Breuer, Assistant Attorney General of the Criminal Division of the Department of Justice; Janice K. Fedarcyk, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office; and Christopher Pappas, Acting Regional Director, Federal Protective Service (“FPS”).

The defendant admitted that he sent an e-mail threatening to kill the vice president and chief operating officer of the NFA. Specifically, on September 30, 2010, the defendant sent an e-mail with a subject line of “You’re a Dead Man,” in which the defendant told the vice president and chief operating officer of the NFA that he had hired trained assassins to kill him and that his “body [would] never be found” because it would be in “little bits and pieces.”

The defendant also admitted that he posted threats to kill more than 40 government and regulatory officials on a website that he operated. On one of those website pages, the defendant invited others to “[g]o buy a gun” and take back the country and stated that he would be the first one to lead by example. On another page on his website, the defendant included an “Execution List” with the names of more than 40 current and former officials of the SEC, FINRA, NFA, and CFTC. That list included the chairperson of the SEC, the chairman of the CFTC, a former acting chairman and commissioner of the CFTC, the chairman and CEO of FINRA, the former chief of enforcement at FINRA and other employees of the NFA and CFTC. The defendant wrote that “[t]hese people have got to go. And I need your help, there are just too many for me alone.” Finally, the defendant posted a $100,000 reward on his website for personal information of those individuals and proof that they were punished. McCrudden started broadcasting these threats over the Internet shortly after the CFTC filed a civil enforcement lawsuit against him in U.S. District Court in Central Islip in early December, 2010. McCrudden has been the subject of various enforcement or disciplinary proceedings at the NFA, FINRA and the CFTC for several years.

“This defendant crossed the line when he directly threatened to kill public officials who were working to keep our financial markets fair and open, and invited others to join him. He thought he could hide in the shadows of the Internet and disseminate his threats and instructions. He was wrong. This office will not tolerate, and will vigorously prosecute, those who threaten to kill men and women who dedicate their lives to public service,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the United States Attorney’s Office, Northern District of Illinois, for its cooperation and assistance in the investigation.

“Mr. McCrudden made bone-chilling and graphic threats against dozens of public officials,” said Assistant Attorney General Breuer. “As this prosecution reflects, the Department of Justice will act swiftly to identify and prosecute anyone who attempts to retaliate against public officials. Public servants must be able to carry out their duties without fear of being targeted.”

FBI Assistant Director in Charge Fedarcyk stated, “The conduct of McCrudden was way beyond mere speech. By his admission, he not only directly threatened to kill government and regulatory officials, but he also listed dozens of officials and offered a reward to others to kill them. This outrageous conduct is not only dangerous, but an affront to civil society.”

When sentenced by United States District Judge Denis R. Hurley, the defendant faces a maximum term of imprisonment of 10 years.

The government’s case was prosecuted by Eastern District of New York Assistant United States Attorneys James McMahon and Christopher Caffarone, with the assistance of the Computer Crime and Intellectual Property Section in the Department of Justice’s Criminal Division. The Office of International Affairs in the Department of Justice’s Criminal Division also provided assistance in this case.

The Defendant:

VINCENT MCCRUDDEN

Age: 50