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Last Updated: Monday, 25 August, 2003, 07:49 GMT 08:49 UK
Freddie Mac seeks new chief
New York apartments
Freddie Mac backs one in six US homeowners
US mortgage giant Freddie Mac has said it will move quickly to find a new president after it was told to remove chief executive Gregory Parseghian by its regulator.

The company, which is one of the US's largest financial institutions, is at the centre of an accounting scandal currently being probed by regulators and Congress.

It restated its earnings in June by $1.5bn, after admitting that it had massaged its results for years.

Freddie Mac's general counsel, Maud Mater, was also removed in Friday's shake-up.

Under pressure

Freddie Mac is one of two large quasi-state companies that underwrite most US mortgages.

The removal of two senior executive follows pressure from regulators, the Office of Federal Housing Enterprise.

The organisation's head, Armando Falcon, said he had decided to request the dismissals after a review of the conduct of senior officials in the company.

In July, a 100-page report by lawyers hired by Freddie Mac's board accused executives of breaching accounting rules in an effort to smooth out volatility in its financial statements.

The report said executives were under pressure to meet analysts' expectations and uphold the company's image on Wall Street, where it had earned the title "Steady Freddie."

Mr Parseghian, formerly Freddie Mac's chief investment officer, had been lined up to take over from chairman and chief executive Leland Brendsel and president David Glenn.

However, the critical report, released in July, said Mr Parseghian was involved in several questionable transactions in his former job.

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