Freddie Mac Investment Made Buffett Jump Ship

Law360, New York (October 31, 2007, 12:00 AM EDT) -- A questionable investment by mortgage company Freddie Mac caused Warren Buffett to become suspicious of the company's finances and sell a major chunk of his stock in the lender, the billionaire investor testified at the trial of former Freddie Mac chief Leland C. Brendsel.

Buffett, who testified by video on Monday, told an administrative law judge that the sale, enacted just before the government-sponsored lender became mired in an accounting fraud scandal, resulted from an investment by the company that had no direct relation to its...
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