In the Matter of Franklin D. Raines, et al.

This was a federal regulatory matter in which charges were brought against certain former officers and directors of the Federal National Mortgage Association (Fannie Mae), including Franklin Raines, the former Chairman and CEO. These charges were brought by the Office of Federal Housing Enterprise Oversight (OFHEO), the regulator of Fannie Mae. Defendants were alleged to have improperly implemented two Financial Accounting Standards Board (FASB) standards–FAS 91 and FAS 133–in an effort to smooth earnings inappropriately.

Econ One was retained by counsel for Franklin Raines to conduct analyses and perform research while assisting Professor James Barth regarding a comparison of the practices and policies of the OFHEO and the Office of the Comptroller of the Currency (OCC) with particular emphasis on those involving safety and soundness. Donald McCarthy conducted this work which involved: (1) the review and analysis of examination forms and work product produced by OFHEO regarding its regulation and supervision of Fannie Mae; and (2) the review of the safety and soundness practices and policies of the OCC. The case settled after the filing of expert reports.