Opinion

Bethany McLean

from The Great Debate:

Fannie and Freddie are more complicated than that

Ralph Nader
Feb 21, 2014 18:11 UTC

This article was written in response to “How Ralph Nader learned to love Fannie and Freddie” (February 18) by Bethany McLean.

Bethany McLean’s article deserves a number of clarifying responses.

McLean injects an air of complexity and confusion with regard to my positions on a number of separate issues in what seems to be an attempt to imply a more interesting narrative for her article than exists in reality. Some clarifications are in order:

In the 1990s and early 2000s I opposed corruption in the government-sponsored enterprises (GSEs). I was clear about my admonition of the government subsidies they received in the form of an implicit government guarantee without meeting their obligations to advance affordable housing. I was clear that their drive for profits could tempt them deeper into murky legal waters. My opposition to their management compensation packages and questionable accounting practices were made plain.

Now I am advocating for the GSEs’ shareholders’ rights. This is an issue separate from the previous transgressions and corruption.

In its conservatorship of the GSEs, the federal government has used and abused GSE shareholders. It has unfairly treated the GSEs differently than other bailed-out corporations that were equally -- or more -- at fault for the financial crisis.

How Ralph Nader learned to love Fannie and Freddie

Bethany McLean
Feb 18, 2014 21:34 UTC

Corrects story issued February 18 in third-to-last paragraph regarding efforts to contact Ralph  Nader.

“It is time for [government-sponsored enterprises] to give up ties to the federal government that have made them poster children for corporate welfare. Most of all, Congress needs to look more to the protection of the taxpayers and less to the hyperbole of the GSE lobbyists. –Ralph Nader, testimony before the House Committee on Banking and Financial Services, June 15, 2000

“Fannie Mae and Freddie Mac should be relisted on the NYSE and their conservatorships should, over time, be terminated. –Ralph Nader, letter to Treasury Secretary Jacob Lew, May 23, 2013

Is Steve Cohen the real target in this trial?

Bethany McLean
Feb 5, 2014 22:11 UTC

The fate of Mathew Martoma, the former SAC Capital portfolio manager charged with the biggest insider trade in history — more than $275 million in profits and avoided losses, says the government — is now in the hands of a 12-person jury, which began deliberations in a Manhattan courthouse Tuesday afternoon.

But whatever the verdict for Martoma, the trial has been bad news for someone else: Martoma’s former boss, SAC head Steve Cohen. Given the slow, but relentless, nature of the government’s actions against Cohen, it might be worth remembering the old adage: It ain’t over til it’s over.

Cohen has, to date, famously avoided any criminal charges personally — despite a string of other government actions against both him and his firm. Last March, SAC agreed to pay more than $600 million to settle civil insider trading charges, brought by the Securities and Exchange Commission, involving Martoma’s trade. Then, on July 19, the SEC charged Cohen with failing to supervise his employees, alleging that he “received highly suspicious information that should have caused any reasonable hedge fund manager to investigate the basis for trades” made by Martoma and another manager.

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