Thu Aug 5, 2004

NEW YORK (Reuters) - Mortgage finance company Freddie Mac (FRE.N: Quote, Profile, Research) said it appointed Eugene M. McQuade, a long time executive at FleetBoston Financial before it was acquired by Bank of America Corp. (BAC.N: Quote, Profile, Research) earlier this year, as its president and chief operating officer.

The appointment is the latest management change since Richard Syron was made chairman and CEO in January in a bid restore investor faith in Freddie Mac. The company has been embroiled in an accounting scandal that emerged last summer.

McQuade, 55, succeeds Paul Peterson, who had been with the company for 15 years. McQuade was president and chief operating officer of FleetBoston Financial Corp., and had a brief stint as president of Bank of America after it acquired Fleet in April.

He was the most senior official from Fleet to leave the combined bank after the merger was completed, and reportedly left with a $25 million severance package.

Syron, a former head of the American Stock Exchange and of the Federal Reserve Bank of Boston, has made several other senior management changes, including the addition of an executive vice-president of investments and a new general counsel.

McQuade's new post is expected to become effective in September, and he is expected to be nominated to the board of directors at its annual meeting in November, according to a release.

Freddie Mac, which restated earnings by $5 billion over 2000-2002 and earlier periods, did not report 2003 financial results until June. It has told investors not to expect 2004 earnings reports until next March.

The company has said it misapplied accounting rules so that it could smooth earnings to conform more closely to earnings expectations on Wall Street. The restatements showed the company had both understated and overstated profits over the time periods in question.

Rep. Richard Baker earlier this month told Reuters he was crafting a letter to the New York Stock Exchange to question why Freddie Mac remains listed as a public company despite delays in reporting earnings.

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