The news comes as no surprise to Freddie Mac; the company gave the SEC a heads-up on suspected wrongdoings last week after calling in president and COO David Glenn on purported document tampering. Freddie Mac publicly announced Glenn's immediate dismissal Monday. Glenn had been with the company for 13 years. Two other top players--CEO Leland C. Brendsel and CFO Vaughn Clarke--have also vacated their posts in light of the recent revelations.

Freddie Mac officials have been working with the SEC for the last five months on the government group's informal inquiry into the matter, in an effort to sort out inconsistencies in reported earnings. In a foreshadowing of things to come, the company revealed in January that it was obliged to restate its earnings for the period spanning the years 2000 through 2002. "The Board of Directors is continuing to supervise closely the company's evaluation of all matters related to the restatement," Freddie Mac Board of Directors chairman Shaun O'Malley says. "Our Audit Committee counsel's active review, as of this date, does not indicate that any employee of Freddie Mac other than Mr. Glenn has engaged in conduct of the kind we disclosed on Monday. We can also confirm that the conduct we disclosed on Monday related to Mr. Glenn's diaries and not to the company's accounting records."