Report rebukes Fannie Mae; company fined $400 million
Washington – Senior executives at Fannie Mae manipulated accounting to collect millions of dollars in undeserved bonuses and to deceive investors, a federal report charged Tuesday. The government-sponsored mortgage company was fined $400 million.
The blistering report by the Office of Federal Housing Enterprise Oversight, the result of an extensive three-year investigation, was issued as Fannie Mae struggled to emerge from an $11 billion accounting scandal. The housing-oversight agency and the Securities and Exchange Commission announced the $400 million civil penalty against Fannie Mae in a settlement over the alleged accounting manipulation.
Of that amount, the $350 million assessed by the SEC will go to compensate Fannie Mae investors affected by the alleged violations.
The company also agreed to limit the growth of its multibillion-dollar mortgage holdings, capping them at $727 billion, and to make top-to-bottom changes in its corporate culture, accounting procedures and ways of managing risk. Thirty executives and employees at the company – including Daniel Mudd, president and chief executive – as well as others who have left will be reviewed for possible disciplinary action or termination.
DENVER
Fight-show promoter gets 8 years for fraud
A judge has sentenced a Denver promoter of martial-arts fighting shows to eight years in prison for defrauding five investors out of $147,000.
Rico Vecchiarelli, 30, may serve just four years if he pays the investors back, state officials said Tuesday. He was sentenced by a Denver District Court judge on Friday.
Vecchiarelli promised investors in his Infinity Investment Properties that their money would go toward real-estate purchases. But Vecchiarelli used the funds for personal use, prosecutors said. Vecchiarelli, also known as Rico Vecc, is the founder of Denver-based American Championship Fighting.
DENVER
Chipotle holds first shareholder meeting
Chipotle Mexican Grill Inc. held its inaugural shareholder meeting Tuesday in Denver. Shareholders of the restaurant chain re-elected founder and chief executive Steve Ells and former McDonald’s executive Patrick J. Flynn as directors and ratified the selection of Ernst & Young LLP as the company’s independent public accountant.
Chipotle officials declined an interview request after the 20- minute meeting, citing the federally mandated quiet period following the recent secondary stock offering by certain shareholders and the company’s former parent, McDonald’s.
BOULDER
Solar system nets $30,708 Xcel rebate
Xcel Energy will present a $30,708 rebate check today to Eric Doub, a Boulder homeowner who installed a 6.8-kilowatt solar-panel system.
The check is part of a solar rewards program that rebates part of the cost of installing solar systems in homes. The company will issue more than $150,000 in rebates by the end of June.
LAFAYETTE
Medical center OK’d for trauma services
Exempla Good Samaritan Medical Center is now a Level III trauma center. The medical center recently received the designation from the Colorado Department of Public Health and Environment.
The medical center has started providing trauma services that include comprehensive care for badly injured patients, such as auto-crash victims.
ONEONTA, N.Y.
Anschutz to receive soccer medal of honor
Major League Soccer investor and team owner Philip Anschutz will receive the National Soccer Medal of Honor, the highest honor in pro soccer, and will be inducted into the National Soccer Hall of Fame on Aug. 27.
Anschutz, through his company Anschutz Entertainment Group, is a founding investor of Major League Soccer and operates four teams.
PUEBLO
Turnout low for Xcel power-plant jobs
Employment officials say they are surprised more workers aren’t trying to land jobs building a $1.4 billion power plant for Xcel Energy in Pueblo, a city with one of the highest metropolitan jobless rates in the state.
The project will require more than 1,000 workers at the peak of construction late next year, including electricians, plumbers, pipefitters, carpenters, welders and boilermakers. Fewer than 400 people showed up at a recent job fair in Pueblo. Last fall, a similar fair drew 1,500 people.
GEORGETOWN, Del.
News Corp. ordered to revise settlement
A judge ordered News Corp., the media company controlled by billionaire Rupert Murdoch, to revise the settlement of a shareholder lawsuit over its poison-pill takeover defense.
Delaware Chancery Court Judge William B. Chandler III said Tuesday he will approve the accord after lawyers clarify a section that limits investor suits against News Corp. Douglas County-based Liberty Media Corp., which owns 18 percent of News Corp., had objected that the wording was too broad.
TEXARKANA, Texas
TiVo wants to shut rival EchoStar service
TiVo Inc., which created the market for digital television recorders, asked a judge to shut down a competing service offered by Douglas County-based EchoStar Communications Corp. because it’s infringing on a patent.
A jury found in April that EchoStar is violating TiVo’s patent for products that let a viewer record one TV program while watching another. U.S. District Judge David Folsom, who presided over the case in Texarkana, Texas, is to oversee a trial next month on whether the patent can be enforced.
NEW YORK
Vonage prices IPO at $17 per share
Vonage Holdings Corp., the Internet telephone pioneer, priced its initial public offering Tuesday evening at $17 a share, in the middle of the expected range.
Vonage shares are expected to start trading today on the New York Stock Exchange under the symbol “VG.” In regulatory filings, Vonage said it had expected to sell 31.25 million IPO shares for $16 to $18 each. At the final price, the IPO is worth $531 million.
URBANA, Ill.
Splenda maker sues Chinese firm for theft
Tate & Lyle Plc, the maker of the calorie-free sweetener Splenda, began legal action against a Chinese company accused of stealing its profitable sucralose manufacturing technology.
A lawsuit filed Monday in U.S. District Court in Urbana, Ill., said Hebei Sukeri Science and Technology Co. and six U.S. importers are violating Tate & Lyle’s U.S. patent for sucralose.
