Our Investors
Inside Information
The use of inside, or non-public, material information in connection with the purchase or sale of Freddie Mac securities (including its debt and mortgage-related securities) or any other company’s securities, is unethical and is generally prohibited by law. Non-public material information includes information (about Freddie Mac or another company) that has not been effectively disclosed to the general public, and that could, if known, affect a reasonable investor’s decision to buy or sell the securities of Freddie Mac or the other company.
These restrictions apply whether you are trading for your own accounts, trading on behalf of Freddie Mac or trading on behalf of any other person or entity. Similarly, you may not disclose non-public, material information to others so that they may trade in securities based on that information.
You should pay particular attention to your possession of material non-public information related to Freddie Mac’s mortgage-related securities that you are purchasing or selling. You may not engage in conduct that could result in, or appear to be the result of, insider trading in Freddie Mac’s mortgage-related securities.
| Policies & Procedures | |
|---|---|
| Policy 7-115 | Information Wall Policy |
| Policy 7-145 | Insider Trading and Related Conduct |
Information Wall and Restricted Persons
Many Freddie Mac employees engage in mortgage purchase activities — either purchasing mortgages from sellers and originators or financing those mortgage purchases. These employees regularly obtain access to detailed information about those mortgages and our mortgage sellers. A relatively small number of employees in the corporation engage in trading activities — purchasing and selling Freddie Mac’s mortgage-related securities in transactions with other investors. Trading activities occur based on publicly available information. To ensure that Freddie Mac’s trading activities are conducted based on the same information that is available to other investors, Freddie Mac has established an “Information Wall” policy designed to restrict the flow of certain information to trading employees (referred to as “Restricted Persons”). We should learn and understand the types of information covered by the Information Wall policy as well as know who are Restricted Persons at Freddie Mac. Restricted Persons are identified on the Corporate Compliance Division’s site on HomeFront. We are responsible for knowing and complying with the Information Wall policy.
| Policies & Procedures | |
|---|---|
| Policy 7-115 | Information Wall Policy |
Insider Trading
Q: A consultant I work with told me the other day that her company was doing very well and was going to make a few key investments that were sure to send the company’s stock through the roof. She told me that I should buy some of the company’s stock now before the company makes the news public. We have a friendly working relationship, and I am sure she would not have shared this information with me if she were not allowed to under her company’s policies. I know Freddie Mac has rules regarding employees’ personal investments, and I have heard a lot about insider trading in the news so I thought I should ask if I could purchase stock in this consultant’s company.
A: Unfortunately, this consultant should not have shared this confidential and proprietary information with you, which likely violated her own company’s policies. With regard to your own actions, you are not allowed to purchase stock in the consultant’s company, since you would be engaging in a securities transaction based on material non-public information.
Insider trading rules address transactions beyond your own company’s stock. Under the securities laws, you are prohibited from engaging in a transaction (e.g., purchase, hedge, sale) in any company’s stock when you possess material non-public information about that company.
Given the facts you’ve described, buying stock in the consultant’s company would be considered insider trading, which is against the law and the Code of Conduct. As a Freddie Mac employee, your investment activities must be free from even the appearance of having been based on non-public or other information gained through employment with Freddie Mac. In addition, employees’ investments in companies with which Freddie Mac does business is subject to higher scrutiny and additional rules.
Detailed guidance on personal investment rules and prohibitions can be found in the Corporate Insider Trading and Related Conduct Policy (Policy 7-145) and the Personal Securities Investments Policy (Policy 3-206).
“Window Periods” and Pre-Clearance of Transactions in Freddie Mac Securities
To help protect against the appearance of insider trading, Freddie Mac designates periods when personal trading in Freddie Mac securities is permissible and periods when such trading is prohibited. We may not engage in transactions in Freddie Mac securities outside of a “window period” or within a “black out period” unless the transaction has been pre-cleared by the Legal Division. The length of these periods and the requirement for pre-clearance of trades may vary based on the employee’s level in the Company or job responsibilities, as well as other developments that can affect the timing or regularity of Freddie Mac’s financial disclosures.
| Policies & Procedures | |
|---|---|
| Policy 7-110 | Securities Transaction Pre-Clearance Policy |
| Policy 7-145 | Insider Trading and Related Conduct |
Truthful and Accurate Reporting
We understand the importance of truthful and accurate records to Freddie Mac’s reputation and to the integrity of the markets in which we do business. Freddie Mac business records, records prepared for submission to a government agency, and public disclosures must be truthful, accurate, fair and understandable given their intended use. We will not intentionally falsify or render misleading any book, record or account that reflects transactions of Freddie Mac or dispositions of Company assets. If we prepare reports or Company records based on information provided by others, we will exercise reasonable care to be sure that those reports or records do not contain misrepresentations or misleading information.
We also recognize the legal and business importance of Freddie Mac’s internal accounting controls and record-keeping policies and we will maintain and adhere to them. Freddie Mac’s accounting records must be complete, accurate and in reasonable detail. These records include books of original entry and other financial information used for internal management decision-making and external reporting. The underlying transactions must be properly authorized and recorded on a timely basis in order to permit preparation of financial statements in accordance with generally accepted accounting principles and to maintain accountability of assets. All funds and assets must be fully and properly recorded on Freddie Mac’s books.
All employees must complete expense forms truthfully and accurately.
| Policies & Procedures | |
|---|---|
| Policy 1-150 | Complaint Policy for Accounting, Internal Accounting Controls and Auditing Matters Pertaining to Freddie Mac’s Business |
| Policy 4-103 | Correcting Errors in the Financial Statements |
| Policy 9-112 | Travel and Entertainment |
| Policy 9-114 | Disbursement of General & Administrative Expenses |
Improper Influence on Conduct of Audits
In accordance with legal and regulatory requirements, independent auditors periodically audit Freddie Mac’s financial statements. We will not directly or indirectly take any action to coerce, manipulate, mislead or fraudulently influence any independent or certified public accountant engaged in the performance of an audit or review of Freddie Mac’s financial statements for the purpose of rendering those financial statements materially misleading, nor will we direct any other person to do so. The same restrictions apply to the audit and examination activities of regulators and internal auditors.
We will cooperate fully, promptly and truthfully in any audit of the Company’s financial statements. This obligation includes, among other things, responding to requests for information, participating in interviews, and disclosing all information relating to the subject matter of the audit.