Avoiding Conflicts of Interest
Accepting Gifts, Meals and Entertainment
In our role as Freddie Mac employees, the acceptance of even a well-intentioned gift or offer of entertainment can be misinterpreted as an attempt by the donor to improperly influence our behavior. With this in mind, we may:
- Not ask for gifts, entertainment, travel or anything of value;
- Not accept cash;
- Not accept gifts totaling more than $100 in aggregate value per source per calendar year; and
- Not accept gift cards, gift certificates or other cash equivalents, greater than $25 in aggregate value per source per calendar year.
We generally may accept:
- Business meals and entertainment (i.e., meals and entertainment that have a business purpose and at which the donor is present) that are not lavish, too frequent, or in excess of generally accepted practices;
- Gifts totaling $100 or less in aggregate value per source per calendar year;
- Gift cards, gift certificates or other cash equivalents totaling $25 or less in aggregate value per source per calendar year; and
- Gifts from family or friends that are not offered because of our status as a Freddie Mac employee.
| Policies & Procedures | ||
|---|---|---|
| Policy 3-202 | Gifts, Entertainment and Other Gratuities to or from Third-Parties | |
| Policy 9-112 | Travel and Entertainment | |
Providing Gifts and Entertainment
We may provide to Freddie Mac customers, other business partners and industry members gifts or entertainment that represent reasonable complements to business relationships. The value of any gifts should not exceed $100 in aggregate value per recipient per calendar year. Offers of entertainment should further the business interests of Freddie Mac, and not be lavish or in excess of generally accepted business practices. We will not provide gifts or entertainment if doing so could be seen by others as engaging in bribery or other improper influence, as consideration for a business favor or as knowingly violating the recipient’s corporate policies.
Various laws, regulations and rules limit or prohibit the giving of gifts and entertainment to, and the receipt of gifts and entertainment by, government employees and elected officials (including employees of states and municipalities and their investment and retirement funds). Penalties for violating these laws, regulations and rules can be severe.
Freddie Mac expects its employees to comply with laws, regulations and rules governing the provision of gifts to, and the receipt of gifts by, government employees and elected officials. Freddie Mac employees must also avoid engaging in any conduct that might resemble giving or receiving a bribe or unlawful inducement. Company policies require pre-approval for the provision of gifts and entertainment in some situations. Consult corporate policies for more information.
| Policies & Procedures | |
|---|---|
| Policy 3-202 | Gifts, Entertainment and Other Gratuities to or from Third-Parties |
| Policy 7-605 | Oversight of State and Local Lobbying Activities |
| Policy 7-607 | Foreign Corrupt Practices Act (FCPA) |
| Policy 9-112 | Travel and Entertainment |
Travel and Lodging Expenses
To avoid the appearance of an obligation or lack of objectivity, Freddie Mac must pay for our travel and lodging expenses related to conducting Company business. As explained in more detail in corporate policies, we generally will not accept offers of either business or personal travel or lodging from people or entities that do business with or are attempting to do business with Freddie Mac. Employees can seek guidance in specific situations by consulting relevant corporate policies or by contacting the Corporate Compliance Division.
| Policies & Procedures | |
|---|---|
| Policy 3-202 | Gifts, Entertainment and Other Gratuities to or from Third-Parties |
| Policy 9-112 | Travel and Entertainment |
Loans, Discounts and Other Preferential Treatment
Employees may not solicit or accept discount prices, more favorable loan terms, loan guarantees, investment opportunities, or any other similar treatment or benefits from any source that are offered to them because of their status as Freddie Mac employees, unless the terms are offered to a broad group of individuals in order to encourage sales of a product or service to those individuals (e.g., an offer of discounted banking services or discount restaurant coupons to all Freddie Mac employees at the same geographic location or to all tenants in an office building that is occupied in part by Freddie Mac). Employees must not accept such benefits if the offer is, or appears to be, an attempt to obtain favorable treatment in dealings with Freddie Mac.
In addition, Freddie Mac is restricted by certain laws, regulations and Company policies and processes from making, or arranging for, loans and other extensions of credit to its executive officers and members of the Board of Directors.
| Policies & Procedures | |
|---|---|
| Policy 3-202 | Gifts, Entertainment and Other Gratuities to or from Third-Parties |
Bribes, Kickbacks and Other Illegal Payments
We will never offer or accept bribes, kickbacks or other illegal payments. If we are offered such a payment, we will decline to accept it. We are committed to complying with U.S. and international anti-corruption laws and standards, including the Foreign Corrupt Practices Act (FCPA), which prohibits companies (including their agents, officers and employees), from offering anything of value to foreign government officials to influence decisions, obtain or retain business or secure any improper advantage. It is important to note that under the FCPA, employees of foreign government-owned entities, such as government-owned banks and financial institutions, are considered government officials.
| Policies & Procedures | |
|---|---|
| Policy 3-214 | Progressive Discipline |
| Policy 7-607 | Foreign Corrupt Practices Act (FCPA) |
| Policy 11-214 | Mortgage Fraud Reporting |
| Policy 11-215 | Anti-Fraud Policy |
Acceptance of Tickets
Q: One of Freddie Mac’s business partners, ABC Company, just finished working on a large and time-consuming project. As the project manager for Freddie Mac, I worked closely with the ABC Company’s project team. When the work was concluded, the project team presented me with a thank you gift and note saying, “It was great working with you. Enjoy the tickets and let me know how you enjoy the Super Bowl.” The gift consisted of four tickets to the Super Bowl. Am I allowed to accept this gift under the Code of Conduct?
A: No, and here’s why. The tickets to the sporting event are a gift because the business partner is not inviting you to the event, but giving you tickets to it. Because the amount of just one Super Bowl ticket exceeds the $100 gift limit as outlined in Corporate Policy 3-202, you would not be allowed to accept the gift. The acceptance of such a lavish gift could give the appearance of a conflict of interest.
If, however, you were invited to attend the event with the business partner, then it would be considered business entertainment. The guidelines for acceptable business entertainment set forth in Policy 3-202 are that the business entertainment further the business interests of Freddie Mac and is not inappropriate, lavish, or frequent. For business entertainment involving a “Big Ticket” event such as the Super Bowl, you would need to get pre-approval from your second-level supervisor and from the Corporate Compliance Division before accepting the offer of business entertainment. Questions of this nature can also be directed to the Compliance & Ethics Helpline (877) 301-CODE (2633).
Outside Employment and Other Outside Activities
A conflict of interest may arise if an employee engages in any outside activities that may be inconsistent with Freddie Mac’s business interests. It is our responsibility to avoid situations in which our loyalty to Freddie Mac, or availability to perform our job duties when required, could be compromised. Determining whether a particular situation would create a conflict of interest requires the analysis of specific factual circumstances and the consideration of many factors. More specific guidance related to outside employment, participation on outside boards, and other outside activities, can be found in corporate policies or by contacting the Corporate Compliance Division.
| Policies & Procedures | |
|---|---|
| Policy 3-203 | Outside Employment and Other Outside Activities |
Immediate Family and Household Members
Situations may arise in which a Freddie Mac competitor, vendor or customer employs one of our immediate family or household members (as defined in the Company’s Outside Employment and Other Outside Activities Policy). These situations call for extra sensitivity to security, confidentiality of information and conflicts of interest. We are therefore required to review with our managers any such situation to assess the nature and extent of any concern and how it can be resolved. We must not use our personal influence to induce Freddie Mac to do business with a company in which our immediate family or household members have an interest.
We may not evade the provisions of the Code or of any corporate policy or procedure by asking or allowing another person to do something that the Code, policy or procedure prohibits us from doing personally. For example, the investments of our immediate family or household members can result in a conflict of interest no different than if we owned the investment ourselves. Similarly, a gift to a Freddie Mac employee’s immediate family or household member can raise the appearance of a conflict. If you have questions in this area, consult your manager or Corporate Compliance.
| Policies & Procedures | |
|---|---|
| Policy 3-202 | Gifts, Entertainment and Other Gratuities to or from Third-Parties |
| Policy 3-203 | Outside Employment and Other Outside Activities |
| Policy 3-206 | Personal Securities Investments |
Outside Employment
Q: I hold a realtor’s license and would like to work as a real estate agent part-time. Is this something I am allowed to do as a Freddie Mac employee?
A: Yes (unless your division’s policies (e.g., HomeSteps) otherwise prohibits or limits such activity), Freddie Mac employees are generally permitted to work as real estate agents and/or brokers. However, Freddie Mac employees working as real estate agents or brokers may not:
- Work directly with the secondary mortgage market;
- Deal in properties that are owned by Freddie Mac or Fannie Mae; or
- Assist other employees with the purchase or sale of properties in connection with the Freddie Mac relocation program.
Subject to the above-listed prohibitions and compliance with Corporate Policy 3-203, employees may provide real estate agent services to other employees, but must make clear that they are doing so in their personal capacity. As with all outside employment, any such services must be performed on the employee’s own time.
Relationships in the Workplace
To ensure that our workplace is fair and untainted by any possible perception of favoritism, we will not place an employee, contingent worker, independent contractor or consultant in a position in which he or she will supervise or have effective control over one of his or her relatives (as defined in the Company’s Relationships in the Workplace Policy) or an individual with whom the person has a dating relationship. Corporate policies contain additional prohibitions on related persons reporting to the same director and/or officer or otherwise holding positions that create an actual or apparent conflict of interest.
| Policies & Procedures | |
|---|---|
| Policy 3-225 | Relationships in the Workplace |
Personal Investment Limitations
Financial Interests Generally
In addition to complying with policies addressing insider trading and window periods, we will not hold any investment that may cause us to have a conflict of interest with Freddie Mac. To assist in determining whether such a conflict of interest exists, the Company has developed rules related to specific limitations on investments. These rules, which can be found in Freddie Mac’s Personal Securities Investments Policy, apply even when the securities or other financial interests are held by immediate family or household members, through agents and fiduciaries, and intermediary entities whose investment decisions are controlled, individually or collectively, by a Freddie Mac employee or an immediate family or household member.
| Policies & Procedures | |
|---|---|
| Policy 3-206 | Personal Securities Investments |
Freddie Mac Options, Short Sales and “Short Sales Against the Box”
Trading in Freddie Mac’s exchange-traded options (i.e., puts and calls) as well as short sales and “short sales against the box” are generally prohibited. Please consult Freddie Mac’s Insider Trading and Related Conduct Policy for specific rules and exceptions.
| Policies & Procedures | |
|---|---|
| Policy 7-145 | Insider Trading and Related Conduct |
Stock Offerings and Special Investment Opportunities
Accepting an offer to purchase securities in a company that is issuing securities through an initial public offering (IPO) where the general public does not have the same access to those securities may raise ethical issues. We will not request, or knowingly accept, preferential participation in offerings of securities of other companies where the opportunity to participate arises: (i) as a result of our position as a Freddie Mac employee; or (ii) because the offering party is providing the preferential treatment in an attempt to induce Freddie Mac to enter into a transaction or business relationship.
Employees must obtain the written approval of the first officer in their reporting chain and the Corporate Compliance Division prior to participating in any initial public offering of securities of any other company. Such approval shall be based on an assessment of whether we have, or may appear to have, received preferential treatment with respect to such an offering as a result of the criteria set forth in the paragraph above.
| Policies & Procedures | |
|---|---|
| Policy 3-206 | Personal Securities Investments |
| Policy 7-145 | Insider Trading and Related Conduct |