Though federal regulators aimed their sights against former executives at the mortgage giant Freddie Mac in a court proceeding, a federal judge yesterday approved an unusual resolution to the case: The Securities and Exchange Commission and the former Freddie Mac executives agreed “that no party is the prevailing party,” the New York Times reported today. The deal requires modest payments to Freddie Mac investors rather than stiff financial penalties. And in another twist, it explained that “the parties agree, without conceding the strengths or weaknesses of their respective claims and defenses, that it is not in the interest of justice to continue to litigate this matter” — a phrase that has rarely, if ever, appeared in an SEC settlement. The settlement with the executives — Richard F. Syron, the former chief executive; Patricia L. Cook, who served as chief business officer; and Donald J. Bisenius, who was a senior executive in the mortgage guarantee business — is a bookend to one of the most prominent SEC actions stemming from the financial crisis. The case against the Freddie executives started to crumble after the SEC took more than 30 depositions from witnesses. Many of the witnesses did not support the theory of the case put forth by the SEC. And with lawyers on both sides expecting the case not to go to trial for at least another two years, they chose to open settlement talks about six weeks ago.
