Fannie Mae, as you might know, has been heavily involved in the financial crisis of 2008. Along with Freddy Mac, Fannie Mae is a quasi-government mortgage-lender. It was a gigantic cash cow and, perhaps, one would call it a cash cow. They were however contributing to the housing bubble by trading relatively large number of subprime mortgages, most of which were not reported in financial reports, which partially led to collapse of the company and further federal takeover of Fannie Mae.
CEO of Fannie Mae at that moment was Daniel Mudd. One would think, that Mudd, who stayed away from everything “dirty”, should not have gotten in big trouble after seemingly large problems he, as an executive, led Fannie Mae into. Indeed, Daniel has quietly stepped down as a CEO and continued to pursue his dream and attempted to rebuild his career basically from scratch. After leaving he took the helm of a hedge-fund, Fortress Investment Group. He began a completely new life – a Fannie Mae story of his life seemed to end with a not-so-happy ending and Mudd started an entirely new novel. He even put his huge mansion on sale, which clearly indicates that Danny is leaving all the mud behind.
To me it sounded like a perfect ending of a story. I even felt that I started reading a new book – the one that only remotely reminds me of the previous unhappy romance I read. The only similarity seemed to be main character’s name. However, one of the things Mudd forgot to do is clear his name and reputation of mud. “Don’t judge a book by its cover” – one would say. In this case, however, the cover is just simply way too conspicuous and the implied protagonist becomes a clear antagonist in public’s eyes. Mudd couldn’t even start to enjoy his new life, when SEC filed a law suit against poor guy, which led to his resignation as a CEO of Fortress. He was accused of fraudulent actions as a CEO of Fannie Mae. Although he was not the only one who SEC brought law suits on, Mudd was in fact the most prominent one. In fact, company’s board gave Mudd an option: “settle the case quickly and you can stay”. Mudd did not think it was an option; he stepped down and devoted his time to clearing his name. He is Raskolnikov, looking for redemption, and economy is an old grumpy lady, who just had to die at some point (Crime and Punishment by Dostoevsky).
“The charges are baseless and political, and I have no intentions of settling anything,” said Mr. Mudd. So, let us wish Daniel Mudd luck, because it seems to me that fortune is his biggest hope at the moment.