UNITED STATES DEPARTMENT OF LABOR

OFFICE OF ADMINISTRATIVE LAW JUDGES

Edna D. Fordham,

OALJ Case No. 2010-S0X-00051

Complainant,
COMPLAINANTS
RESPONSES
TO
RESPONDENTS INTERROGATORIES

v.
Fannie Mae,
Respondent.

Honorable ALJ Christine Kirby

INTERROGATORY NO. 1: Identify (as that term is defined herein) each and every
person known to you, your agents, or your attorneys, who has knowledge of the facts or
issues upon which the Complaint is based; and state the area or subject matter about
which each such person has knowledge.
RESPONSE: The following individuals may be contacted through: Fannie Mae, 3900
Wisconsin Ave, NW, Washington, DC 20016-2806 Ph: (202) 752-7000 or via Fannie
Mae, 13150 Worldgate Drive, Herndon, VA 20170. The following individuals are
expected to have knowledge of complainants protected disclosures, the employers
knowledge of those activities, the adverse actions taken against the complainant, and the
effects of these actions upon the complainant and her career:
(1) Stephanie Bahr, Director, SOX Technology
(2) Patricia Black, Senior Vice President, Chief Audit Executive, formerly
Vice President for Financial Controls
(3) Mike Gabbay, Senior Technology Risk Analyst/Manager (Herndon, VA)
(4) Nancy Hall, Manager, SOX Technology Program (Herndon, VA)
(5) Bob Leonard, Director, SOX Technology Program
(6) Darlene Slaughter, VP Chief Diversity Officer
(7) Wendy Fischman, Investigator
(8) Leslie Arrington
(9) Arran Adams
The following individuals may be contacted through the Securities and Exchange
Commission, 100 F Street, NE, Washington, DC 20549, (202) 942-8088. They are

Complainants Response to Discovery Requests

expected to have knowledge of the complainants contact with federal regulatory officials
and complainants protected disclosures.
(10)
(11)
(12)

Peter Rosario
Leslie M. Garner
Natasha Guinan

The following individuals may be contacted through the Federal Bureau of Investigation,
601 4th Street NW, Washington, DC 20535, (202) 278-2000. They are expected to have
knowledge of the complainants contact with federal regulatory officials and
complainants protected disclosures.
(13)
(14)

Rebecca Madvay
JoAnne Altenuerg

The following individual may be contacted through the PCAOB, 1666 K Street, NW,
Washington, DC 20006-2803, Phone: (202) 207-9100 and is expected to have knowledge
of complainants contact with them and protected disclosures.
(15)

Bernie McDonough

The following individuals may be contacted through their congressional offices. They are
expected to have knowledge of the complainants contact with federal regulatory officials
and complainants protected disclosures:
(16)
Barney Frank, 2252 Rayburn Building, Washington, DC 20515,
(202) 225-5931
(17)
Paul Kanjorski, 2188 Rayburn House Office Building,
Washington, DC 20515-3811, (202) 225-6511
(18)
Scott Garrett, 137 Cannon House Office Building , Washington,
DC 20515, (202) 225-4465
The following individuals may be contacted through the Federal Housing Finance
Agency (FHFA), 1700 G St., NW, 4th Floor, Washington, DC 20552, (202) 414 3800:
(19)
Gregory Garner and other FHFA staff in accounting, legal, IT,
operational risk and conservatorship
The following individuals are expected to have knowledge of the emotional
distress damages of the complainant, including her symptoms, diagnoses and course of
treatment.

Complainants Response to Discovery Requests

The following individual may be contacted through counsel Stephani Ayers, Esq.,
PO Box 1061, Medford, OR 97501, 813 382 7865 and is expected to have knowledge of
all claims, defenses, and damages:
(23)

Edna Fordham

The following individuals may be contacted through OSHA and have knowledge
of Complainants SOX complaint:
(24) Susan Owens
(25)James Johnston
(26)Henry Yost
The following will also have relevant information
(27)All individuals identified in the documents produced by the complainant or
respondent and the subject matters discussed in those documents.
(28)All individuals identified by the Respondent.
INTERROGATORY NO. 2:
Identify (as that term is defined herein) every person who has possession, custody, or
control of any videotapes, audiotapes, photographs or documents pertaining to any fact or
issue involved in the Complaint; and describe as to each what item such person has, the
full name and address of the person who took or prepared it, and the date it was taken or
prepared.
RESPONSE: Complainant objects to this interrogatory as overly broad, unduly
burdensome, and not reasonably calculated to lead to the discovery of admissible
evidence, particularly in light of Complainant having produced at least 1,000 pages of
documents, prepared by a large number of individuals, created on various dates and
provided to various people.
Subject to and without waiving such objections, Complainant states she does not possess
and did not provide anyone with any videotapes or photographs. Complainant possesses
and has provided copies of documentary evidence from her email account and from her
files regarding her protected activities and reported SEC violations. Those have been
provided to the Respondent. Complainant also created some digital recordings, which
were then transcribed by an employee of Verbal Link or Transcription Studio beginning
in April 2009. These have been provided to the Respondent at EF F.9. Documents and
digital recordings have only been provided to legal counsel and the regulatory bodies

Complainants Response to Discovery Requests

designated with the ability or responsibility to investigate and remediate SOX violations:
the SEC via the staff identified above, the FHFA through the staff identified above,
OSHA via the staff identified above, the FBI through the staff identified above, the DOJ
through the staff identified above, and the PCAOB through the staff identified above.
INTERROGATORY NO. 3: Identify (as that term is defined herein) every person to
whom you expressed concerns regarding controls and designs in the newly implemented
SOX software systems as alleged in Paragraph 23 of the Complaint. Your answer
should include: (1) the date each such concern was allegedly expressed; (2) a summary of
the concern that was allegedly expressed; and (3) a summary of the discussion that
allegedly took place.

RESPONSE: Para 23 states Beginning April 2008, Complainant expressed concerns to
Fannie Maes SOX Technology management regarding controls and designs in the newly
implemented SOX software systems. She raised these concerns during team meetings and
meetings with her SOX Manager, Ms. Hall. Complainant expressed her concerns that
Fannie Maes systems were not fully SOX compliant and would not result in accurate and
reliable data in the quarterly and annual SEC filings.
SOX Application Design (Software) Reviews Overview
SOX Application Design (Software) Reviews were performed only as new systems were
implemented or significant enhancements were made to existing financially significant
applications that had a material impact on the financial statements. Additionally, the
SOX Technology Department was required to document for each application various
control risk assessments which disclosed the control focus of the organization.
SOX Technology did not have an automated tracking mechanism in place during 2008 to
determine when new financial applications were to be released into production. As a
result, applications could be released into production without SOX Technologys
knowledge and without SOX Technologys validation that the new or enhanced system
was SOX compliant.
A new Application Review Questionnaire (ARQ) system was designed and released in
2009 by Peggy Wennemans of IT Governance, which would allow company to track
when new financial applications or significant enhancements to applications were
scheduled to be released into production. An automatic email alert of the Applications
Design Reviews were sent to Bob Leonards email address to notify of upcoming SOX
Application Reviews.
Complainant had knowledge of two specific design reviews pertaining to the Service
Investor Reporting System (SIRs) project and Collateral Management Hedging
Application (CMH) project that were released in 2008. The Design Reviews were

Complainants Response to Discovery Requests

generally performed by Arran Adams and reviewed and approved by SOX Technology
Manager Mike Gabbay.
Between the period April 1, 2008 - April 29, 2009, Complainant initially discussed
concerns regarding concerns surrounding SOX Technologys Design Reviews during
team meetings and during the period that the design reviews actually occurred. SOX
Team members general participants included Arran Adams, Musso Shaikh, Mike Russell,
Jack Crews, Mgr. Nancy Hall, Mgr. Mike Gabbay, and Director Bob Leonard.
Complainant pointed out to the team and managers based on her experience as a financial
statement Audit Manager, that the departments focus primarily on General IT Processes:
Access Management, Change Management and Logging and Monitoring would not
provide a complete basis for certifying systems as SOX Compliant. These referenced
processes were common to both Infrastructure (i.e. operating systems and databases) and
Financial IT Applications (i.e. Collateral Management and Hedging).
Complainant observed that SOX Technology did not use an integrated approach for SOX
Management Testing. Complainant advised SOX Technology Management that it was
necessary for the department to obtain business process documentation addressing IT
Applications to truly gain an understanding of SOX significant input, processing and
output controls for a specific Financial IT Application which is used to generate financial
statements.
The IT Application controls were critical because they directly related to the financial
statement assertions tested by external auditors and for SOX Compliance. Without this
information, SOX Technologys certifications were incomplete which was proven to be
the case by the failure of the Collateral Management Hedging Application.
Timeline of Observations & Discussions
On or about April 1, 2008, The Collateral Management Hedging Application (CMH)
system was released into production. The SOX Technologys design review was
performed after the system was released into production, which is a SOX violation.
On May 2, 2008, SOX Change Control log indicates accounting problems with system
design and interfaces. Remedy Change No. 00337458 was made to remove improperly
included loans from the previous months closed pools. A database modification was
made on the back end of the application rather than an online journal entry.
On or about July 31, 2008, Stephanie Bahrs group updated the Application Change
Control log, four months after the fact, to reflect Hedge Accounting was added to
production in an attempt to comply with SOX Change Management Policy.

Complainants Response to Discovery Requests

On or about August 31, 2008 Arran Adams performed a Design Review for CMH and
the review was approved by SOX Technology Manager Mike Gabbay. SOX
Technologys design review determined that CMH System was SOX Compliant.
Complainant requested a report of CMH Design Review from Respondent. SOX Tech
design review did not consider IT Application controls related to validating FAS 133
effectiveness testing for Hedge Accounting.
On or about August 31, 2008 SOX Technology Director, Bob Leonard states within the
Technology Key Performance Report Executive Summary to Tyrone Barton that Capital
Markets replaced the Hedge Accounting EUC with a production hardened application.
On September 10, 2008 2:03 PM, Arran Adams sent a meeting invite to schedule a
conference call on September 26, 2008, to discuss with Deloitte and SOX Technology
Management internal controls involving CMH Hedge Accounting. The scheduled
meeting attendees for the conference call were the following: Arran Adams, Varma
Penmatsa, Robert Gac, Edna Fordham, anbhalla@deloitte.com; rgulino@deloitte.com;
krunnels@deloitte.com; vmaninarayanan@deloitte.com; Jack Crews, and Tim Fieffer.
Hall also discussed issues with her staff around this period during weekly Technology
Risk and Controls / SOX Oversight status meetings.
On or about September 25, 2008, SOX Technology performed design review of the
Service Investor Reporting System (SIRs) application. SOX Technology design review
did not consider IT Application controls applicable to SIRs and Financial Accounting
Standards as approved by SOX Technology Manager Mike Gabbay. Complainant
requested a copy of the design review.
On or about November 1, 2008, the Service Investor Reporting System (SIRs) was
implemented. The specific date of the roll out and the actual date SOX Technology
performed its version of a design review was extended several times. Complainant
requested a copy of the document from Respondent.
On November 17, 2008, a conference call was scheduled @ 10:30 A.M. with Deloitte
and a discussion draft was distributed of internal control deficiencies that included
Collateral Management Hedging (CMH) and other high risk financial systems. SOX
Technology Manager Nancy Hall discussed with Deloitte system deficiencies involving
IT Applications. The scheduled meeting attendees for the conference call included:
Nancy Hall, Hemant Pradhan, Larry Elder, Arran Adams, Jack Crews, David Kingsland
and Edna Fordham. Hall also discussed issues with her staff around this period during
weekly Technology Risk and Controls / SOX Oversight Status status meetings. Deloitte
also made constructive service comments regarding access issues.
On or about December 1, 2008, Complainant raised her concerns also in Bob Leonards
2008 Accountability Online Survey. Tyrone Barton and Patricia Black had access
Complainants Response to Discovery Requests

privileges to review this survey and read Complainants criticisms about the SOX
Program and Design Reviews.
On December 12, 2008 9:47 AM, Complainant noted there were no formal access
reviews conducted on the ADAM System for CMH System. Management stated they
were concerned adverse condition could result in a deficiency at year-end.
On December 19, 2008, CMH Internal Audit Report was issued which indicated
numerous internal control deficiencies for IT Application controls, Access Management,
Change Management and Logging and Monitoring. The period of the internal audit
report included April 1, 2008 through October 30, 2008. Capital Markets management
stated the intended Remediation Plan of deficiencies and the respective due dates. The
control deficiencies amounted to a material weakness.
On December 29, 2008, Complainant received a copy of CMH Internal Audit Report and
started researching system issues and remediation status per Nancy Halls request. Nancy
Hall refused Complainant access to the internal audit workpapers.
On or about January 2, 2009, SOX Change Control log indicated production updates
occurred to CMH Application although Management claimed Hedging Application use
was discontinued in fourth quarter of 2008.
On or about January 5, 2009 Nancy Hall requests to review CMH without detailed
research of root causes of material weaknesses noted within Internal Audit Report.
On or about January 12, 2009 - Hedge Accounting conference call scheduled by Nancy
Hall.
February 11, 2009 SOX Change Control log indicates production upgrades occurred to
CMH Application although Management claimed Hedging Application use was
discontinued in fourth quarter of 2008. Complainant also noted although a major system
failure occurred with CMH, the majority of CMH SOX change control tickets were
ranked low risk.
February 26, 2009 Fannie Mae indicated in SEC Filing that Hedge Accounting use was
discontinued in Fourth Quarter 2008 although system upgrades and builds continued to
be performed after application allegedly was decommissioned.
On or about March 25, 2009, Complainant gathered from March 25, 2009 conversation
with IT Internal Audit (which was attended by Stephanie Bahr) and other prior
discussions that SOX Technology Management chose to allow the business units to rely
on manual controls, rather than IT application design controls because SOX Technology
did not know if the process documentation existed for many legacy systems or whether
existing management had the skill set to evaluate the controls. Stephanie Bahr indicated

Complainants Response to Discovery Requests

she received a directive from Patricia Black to set up meeting and report results of
meeting back to Patricia Black.
On or about March 25, 2009, email sent by Stephanie Bahr. CMH System Baseline
Requirements document indicated numerous potential design risks that were not
mitigated and resulted in CMH system failure. Baseline indicates project managers
expressed concerns that CMH design possibly would not be in compliance with GAAP,
independent auditors or other regulations company was subject to.
On or about March 31, 2009, Complainant discussed with Peggy Wenneman the new
system developed by her department to trigger SOX Application Design Reviews. The
conversation covered the document that Saber Martin sent to Complainant to explain
what triggers a SOX review. There are a few specific questions that will trigger a review,
when these are for "new applications" or "significant changes to existing applications".
On or about April 27, 2009, A copy of the Bob Leonards Accountability survey with
Complainants SOX concerns therein was sent to Darlene Slaughter, Leslie Arrington and
Wendy Fischman on April 27, 2009 @ 9:24 A.M. Complainants email was
acknowledged by Wendy Fischman on April 27, 2009 @ 4:04 P.M.
Respondent placed Complainant on involuntary administrative leave with pay on April
29, 2009 before she had an opportunity to discuss further at the scheduled April 30, 2009
appointment with Investigations, thus Complainant discussed her SOX concerns with
parties external reporting of protected activities.
On April 29, 2009, Complainant was a participant on a conference call that included
Mike Gabbay, Jasmine Richardson and Stephanie Bahr. Mike Gabbay stated during this
conversation he did not know how to evaluate IT Application controls for design and was
not certain if the process documentation existed for many legacy systems. The CMH
Design review was performed by Mike Gabbay and the CMH system was erroneously
declared to be SOX Compliant. Fannie Maes Internal Audit Report and Deloittes
constructive service comments contradicted Mike Gabbay and Bob Leonard CMH SOX
assessment.
Complainant also reported similar concerns to the individuals identified above in Answer
to Interrogatory No. 1 from the SEC, FBI, PCAOB, FHFA, OSHA, Congressional staff,
and the DOJ following parties.

INTERROGATORY NO. 4: Identify (as that term is defined herein) every person to
whom you stated that you could not ethically review [unresolved SOX deficiencies]
without the information and documentation [you] requested for proper application of
management testing and remediation standards as alleged in Paragraph 25 of the

Complainants Response to Discovery Requests

Complaint. Your answer should include: (1) the date each such statement was allegedly
made; (2) a summary of the statement that was allegedly made; and (3) a summary of the
discussion that allegedly took place.
RESPONSE:
Collateral Management Hedging (CMH) System Overview
Prior to assignment of Remediation Status Project, the Collateral Management and
Hedging System was formerly discussed between April 1, 2008 through the date of the
Remediation Project assignment by Nancy Hall in December 2008.
New software systems (or IT Application) implementations were rare and the CMH
System was a system of interest due to the fact Respondents former fraud violations
related to misapplication of FAS 133 for Hedge Accounting. It was critical that Capital
Markets successfully implemented an IT solution to correct prior material weaknesses
involving Hedge Accounting.
Complainant Factual Allegations
Factual Allegation No. 1
On or about April 1, 2008 prior to implementation, Business Requirements
Specification, Hedge Accounting Business Requirements, Baseline v2.0 stated the
following risks.
The following CMH System risks were defined:
A) No existing system can support this activity
B) No final documentation of effectiveness testing methodology
C) Any inaccuracy of data may expose the company to hedge ineffectiveness
D) Calculations related to hedge linking, hedge effectiveness and changes in fair value
are not accurate
E) Market moves may lead to a situation where we determine our approximation is
not acceptable for effectiveness testing, in which case, we would have little or no
benefit from hedge accounting
F) We fail effectiveness testing due to effects of yield curve shape changes or other
variables that are not offset in the hedging strategy
G) Once a hedge effectiveness testing methodology is employed, the decision may be
difficult to change because it would require justification to support the change, which
would require consultation with our auditors
H) Due to time constraints, system design and building will have to be done before all of
the stress testing and thorough analysis is complete. It is possible that additional
factors discovered in this analysis would cause us to require changes to the
methodology in a way that would require significant system changes .
I) We cannot assure that all issues with our independent accountants, OFHEO and the
Internal Revenue Service can be addressed before significant amount of system
building is started

Complainants Response to Discovery Requests

J) Constraints imposed on Swap or Loan selection may narrow the population of

available instruments so that the program has limited impact.
K) Tax results of hedge accounting program are not yet confirmed
Factual Allegation No. 2
On or about April 1, 2008, the Collateral Management Hedging Application (CMH)
system was released into production.
The SOX Technologys design review was
performed after system was released into production.
Factual Allegation No. 3
On May 2, 2008, Remedy SOX Change Control log indicated accounting problems with
system design and interfaces. Remedy Change No. 00337458 was made to remove
improperly included loans from the previous months closed pools.
A database
modification was made on the back end of the application rather than an online journal
entry.
Factual Allegation No. 4
On or about July 31, 2008, Stephanie Bahrs group updated Application Change Control
log (excel spreadsheet), four months after the fact, to reflect Hedge Accounting was
added to production in an attempt to comply with SOX Change Management Policy.
Factual Allegation No. 5
On or about August 31, 2008, Arran Adams performed a Design Review for CMH and
was approved by SOX Technology Manager Mike Gabbay. SOX Technologys design
review determined that CMH System was SOX Compliant. Complainant noted that SOX
Technologys design review did not consider IT Application controls related to validating
FAS 133 Effectiveness testing for Hedge Accounting. (Complainant requested copy of
the report)
Factual Allegation No. 6
On or about August 31, 2008, SOX Technology Director, Bob Leonard stated within
Technology Key Performance Report, Executive Summary to Tyrone Barton that Capital
Markets replaced the Hedge Accounting EUC with a production hardened application.
Complainant noted SOX Technologys design review did not consider IT Application
controls related to validating FAS 133 Effectiveness testing for Hedge Accounting.
(Complainant requested copy of the report)

Complainants Response to Discovery Requests



Factual Allegation No. 7

On September 10, 2008, Arran Adams sent a meeting invite to schedule a conference call
on September 26, 2008, to discuss with Deloitte and SOX Technology Management
internal controls involving CMH Hedge Accounting. The scheduled meeting attendees
for the conference call were the following: Arran Adams, Varma Penmatsa, Robert Gac,
Edna Fordham, anbhalla@deloitte.com, rgulino@deloitte.com, krunnels@deloitte.com;
vmaninarayanan@deloitte.com, Jack Crews, and Tim Fieffer. Hall also discussed issues
with her staff around this period during weekly Technology Risk and Controls / SOX
Oversight status meetings.
Factual Allegation No. 8
On or about November 6, 2008 @9:41 A.M. Nancy Hall, SOX Technology manager
initially assigned Complainant a project involving investigating the remediation status of
outstanding deficiencies for the period 2006 through 2008 related to the production and
restatement environments.
Factual Allegation No. 9
On or about November 17, 2008, a conference call was scheduled @ 10:30 A.M. with
Deloitte and a discussion draft was distributed of internal control deficiencies which
included Collateral Management Hedging (CMH) and other high risk financial systems.
SOX Technology Manager Nancy Hall discussed with Deloitte system deficiencies
involving IT Applications. The scheduled meeting attendees for the conference call
were the following: Hall, Pradhan, Elder, Adams, Crew, Kingsland, and Fordham. Hall
also discussed issues with her staff around this period during weekly Technology Risk
and Controls / SOX Oversight Status meetings on which Stephanie Bahr and Patricia
Black participated.
Factual Allegation No. 10
On or about November 17, 2008, Deloitte provided constructive service comments
regarding issues involving CMH and other high risk financial applications. Deloitte
alerted SOX Technology of problematic areas before they concluded its external audit for
the period ending December 31, 2008 for SOX 404 Certification.
Factual Allegation No. 11
On or about November 19, 2008 @ 10:55 AM, Complainant noted that Kyle Runnels of
Deloitte requested a meeting with Nancy Hall and Musso Shaikh to discuss known
deficiencies outstanding. Runnels requested management evidence for the following

Complainants Response to Discovery Requests

remediated deficiencies (i.e. Remediation Testing): 11720 (STAMPS), 11766 (CE),

11837 (PRIMA), 11839 (PRIMA), 11842 (PRIMA), 11895 (ORION), 11897 (ORION),
11843 (AS400). Nancy Hall later assigned deficiency research to Complainant on
December 2, 2008 @ 12:17 PM. Complainant noted none of deficiencies known by
Deloitte and SOX Technology Management were reported in 404 SEC filings to
Investors,
although
Deloitte
required
the
status
to
be
remediated.
Factual Allegation No. 12
On or about December 1, 2008, Complainant documented concerns related to Internal
Control Deficiencies noted within the Performance Management System regarding SOX
Program deficiencies based on her direct knowledge of information related to SIRs and
the CMH Design Reviews. Complainant noted SOX compliance issues within Bob
Leonards 2008 Online Accountability Survey. Both Tyrone Barton and Patricia Black
had access privileges to review Bob Leonards Survey and read Complainants criticisms
about the SOX Program and Design Reviews.
Factual Allegation No. 13
On or about December 2, 2008 @ 1:18 PM, Complainant inquired of Nancy Hall and
Musso Shaikh when she had an opportunity to meet in person to discuss the Remediation
project, how it was possible these deficiencies were not reported in SEC Filings by
Deloitte.
Hall responded that Executive Management had their own process of rolling up findings
for the SEC disclosure reporting process. Complainant referred Hall back to an email
sent by Arran Adams on March 20, 2008 @ 1:17 PM which indicated sixty-two
deficiencies were outstanding for periods 2006 through 2007 which related to Access
Controls, Change Mgmt & Logging & Monitoring. Complainant noted the majority of
deficiencies related to 302 Testing.

Complainants Response to Discovery Requests



Factual Allegation No. 14

On or about December 2, 2008 @ 1:18 PM, Complainant noted the following DMS
Internal Control Deficiencies in attached email which Management failed to report in
SEC Filings based on Arran Adams March 20, 2008 email:
Arran Adams March 20, 2008 @ 1:18 PM Email Distribution List included the following
personnel:
Fordham, Edna; Russell, Michael J; Crews, Jack
Leonard, Robert E; Gabbay, Michael S; Hall, Nancy; Miller, David C; Vazquez Jr, Ramon; Adams,
Arran A;

1
2
3
4
5
6
7
8
9
10

DMS
10656
10657
10681
10698
10701
10759
10794
10798
10870
11196

11
12
13
14
15
16
17
18
19
20

DMS
11303
11305
11490
11491
11514
11515
11522
11572
11621
11626

21
22
23
24
25
26
27
28
29
30

DMS
11630
11647
11660
11662
11663
11674
11692
11693
11695
11699

31
32
33
34
35
36
37
38
39
40

DMS
11711
11715
11720
11766
11768
11770
11772
11776
11779
11793

41
42
43
44
45
46
47
48
49
50

DMS
11799
11801
11816
11818
11821
11826
11827
11834
11835
11836

51
52
53
54
55
56
57
58
59
60
61
62

DMS
11837
11839
11840
11841
11842
11843
11844
11845
11847
11857
11861
11862

Note: DMS Deficiencies pertain to Production and Restatement Environments

which Respondent claimed remediated in SEC filings for the period ending September 30, 2007
as published November 9, 2007 and in Investor Summary
Observation: Respondent suppressed the publication of known adverse deficiencies for period:
September 30, 2007 through March 31, 2009
During period Respondent raised approximately $13.8 Billion dollars of capital
while failing to notify investors of existing accounting system internal control deficiencies.
Complainant noted that although all deficiencies pertained to High Risk Financial Systems,
that Respondents (Patricia Black ,Robert Leonard, Stephanie Bahr, Mike Gabbay and Nancy Hall)
Low.
ranked system risks on DMS as Low.
Complainant consulted referenced email to determine if any of the deficiencies requested to be
researched were on this list. List consisted of open deficiencies from 2006 thru 2007.

Complainants Response to Discovery Requests



Factual Allegation No. 15

On or about December 2, 2008 @1:53 PM, Complainant requested a copy of the
supporting Internal Audit Reports for Deficiency Management System (DMS) findings
related to Internal Audit. Complainant also received instructions to access DMS.
Factual Allegation No. 16
December 03, 2008 @ 7:18 PM, Complainant provided a Status Update on the E/Y
Request for Remediation Testing and stated directly to Mike Gabbay and Nancy Hall the
problems with Mike Gabbays work re: the SOX deficiencies.
Factual Allegation No. 17
December 03, 2008 @ 7:18 PM, Complainant reported her concerns to Bob Leonard via
email on same day regarding Mike Gabbays work.
Factual Allegation No. 18
On December 3, 2008 @ 7:30 PM Complainant received a response to discuss with
Nancy Hall and Musso Shaikh and findings to be researched for Remediation Status.
Factual Allegation No. 19
On December 10, 2008 @ 3:46 PM Complainant responded to email addressing Meeting
with Nancy Hall and Musso Shaikh and findings to be researched for Remediation Status.
Factual Allegation No. 20
On December 10, 2008 @ 3:50 PM Complainant reported DMS 11766 condition related
to Grant Thorntons documentation of the SOX Management Test Control Worksheets
(TCWs) which could negatively impact SOX Technologys Management Testing Results
reported to Executive Management. Executive Management used this information as the
basis for its 302 or 404 Certifications. Both Nancy Hall and Musso Shaikh were copied
on emails.
Complainant specifically identified the deficiencies by DMS tracking number that
required correcting in order for the work to comply with SOX based on her Quality
Review of external consultants Grant Thornton work. The specific DMS reference
tracking numbers were the following: 11766, 11720, 11837, 11839, 11842, 11843,
11895, 11897.
Complainant warned Nancy Hall several times, within the referenced emails not to

Complainants Response to Discovery Requests



change the test results and to forward comments to Grant Thornton for review and
correction after reviewing the number of deficiencies SOX Technology concealed in SEC
filings based on Arran Adams March 20, 2008 email. Both Nancy Hall and Musso
Shaikh ignored Complainants SOX Compliance Quality Review notes and
inappropriately pushed the results through as correct to Respondents external auditors
Deloitte.
Factual Allegation No. 21
On December 10, 2008 @ 4:03 PM Complainant reported DMS 11720 condition related
to Grant Thorntons documentation of the SOX Management Test Control Worksheets
(TCWs) that could negatively impact SOX Technologys Management Testing Results
reported to Executive Management. Executive Management used this information as the
basis for its 302 or 404 Certifications. Both Nancy Hall and Musso Shaikh were copied
on emails. See remaining allegations in Fact Allegation No. 20.
Factual Allegation No. 22
On December 11, 2008 @ 10:28 AM, Complainant reported DMS 11837 condition
related to Grant Thorntons documentation of the SOX Management Test Control
Worksheets (TCWs) which could negatively impact SOX Technologys Management
Testing Results reported to Executive Management. Executive Management used this
information as the basis for its 302 or 404 Certifications. Both Nancy Hall and Musso
Shaikh were copied on emails. See remaining allegations in Fact Allegation No. 20.

Factual Allegation No. 23

On December 11, 2008 @ 10:45 AM, Complainant reported DMS 11839 condition
related to Grant Thorntons documentation of the SOX Management Test Control
Worksheets (TCWs) that could negatively impact SOX Technologys Management
Testing Results reported to Executive Management. Executive Management used this
information as the basis for its 302 or 404 Certifications. Both Nancy Hall and Musso
Shaikh were copied on Emails. See remaining allegations in Fact Allegation No. 20.
Factual Allegation No. 24
On December 11, 2008 @ 11:16 AM, Complainant reported DMS 11842 condition
related to Grant Thorntons documentation of the SOX Management Test Control
Worksheets (TCWs) that could negatively impact SOX Technologys Management
Testing Results reported to Executive Management. Executive Management used this
information as the basis for its 302 or 404 Certifications. Both Nancy Hall and Musso
Shaikh were copied on emails. See remaining allegations in Fact Allegation No. 20.

Complainants Response to Discovery Requests



Factual Allegation No. 25

On December 11, 2008 @ 11:21 AM, Complainant responded to DMS Status update
reminder.
Factual Allegation No. 26
On December 11, 2008 @ 11:29 AM, Complainant reported DMS 11843 condition
related to Grant Thorntons documentation of the SOX Management Test Control
Worksheets (TCWs) which could negatively impact SOX Technologys Management
Testing Results reported to Executive Management. Executive Management used this
information as the basis for its 302 or 404 Certifications. Both Nancy Hall and Musso
Shaikh were copied on Emails. See remaining allegations in Fact Allegation No. 20.
Factual Allegation No. 27
On December 11, 2008 @ 1:29 PM, Complainant reported DMS 11895 condition related
to Grant Thorntons documentation of the SOX Management Test Control Worksheets
(TCWs) that could negatively impact SOX Technologys Management Testing Results
reported to Executive Management. Executive Management used this information as the
basis for its 302 or 404 Certifications. Both Nancy Hall and Musso Shaikh were copied
on emails. See remaining allegations in Fact Allegation No. 20.
Factual Allegation No. 28
On December 11, 2008 @ 1:45 PM, Complainant reported DMS 11897 condition related
to Grant Thorntons documentation of the SOX Management Test Control Worksheets
(TCWs) that could negatively impact SOX Technologys Management Testing Results
reported to Executive Management. Executive Management used this information as the
basis for its 302 or 404 Certifications. Both Nancy Hall and Musso Shaikh were copied
on emails. See remaining allegations in Fact Allegation No. 20.
Factual Allegation No. 29
On or about December 10, 2008 @8:13 AM, Complainant received an email from Arran
Adams related to IT Deficiency Cleanup to prepare for year end audit by Deloitte. Nancy
Hall exerted pressure for team to clean up deficiencies before the scheduled Friday
meeting. Complainant later noted none of the deficiencies known by Respondent
management were reported in SEC filings.

Complainants Response to Discovery Requests



Factual Allegation No. 30

On or about December 10, 2008 4:07 PM, Complainant requested from Musso Shaikh
Internal Audit Reports for D&T Evidence Requests.

Factual Allegation No. 31

On or about December 12, 2008 9:47 AM, Complainant noted there were no formal
online access reviews conducted on the ADAM System for CMH System although
system had been deployed since April 1, 2008. Management stated concern this adverse
condition could result in a deficiency at year-end. Complainant questioned how SOX
Technology could be lenient on this matter given the fact the CMH System had been
deployed since April 1, 2008.
Factual Allegation No. 32
On or about December 15, 2008 @ 3:20 PM, Complainant documented information
related to her goals in the Performance Management System in preparation for her 2008
Performance Evaluation and that the system had not been closed out by Human
Resources at this point.
Factual Allegation No. 33
On or about December 16, 2008 @ 1:11 PM, Complainant noted that SOX Management
Testing TCWs test plans were not rolling up to TCW Test Summary based on SOX
Management Testing program managed by SOX Technology Manager, Mike Gabbay.
Complainant provided discrepancies to Mike Gabbay directly and discussed the matter
directly with Nancy Hall and other team members.
Factual Allegation No. 34
On or about December 19, 2008, Complainant was assigned project to determine
remediation status of Internal Audit deficiencies. Complainant also left early this day
after noon. It was the beginning of her Christmas holiday vacation and Complainant was
expected to report back to work as scheduled on Monday, December 29, 2008.
Complainant before leaving for the Christmas holiday performed a cursory review of
internal audit findings for Collateral Management and Hedging application and requested
to review the supporting Internal Audit workpapers. Complainant believed her request
was reasonable based on the customary practices of the SOX Technology office. SOX
Technology personnel were advised that they had access to internal audit resources in
order to manage SOX Technology more effectively.
Due to recent organizational changes, SOX Technology personnel were also advised by
Complainants Response to Discovery Requests



Jacqie Wagner, the Chief Audit Executive who managed both the SOX Program and the
Internal Audit function that the SOX Technology department was independent of Internal
Audit, and that the SOX Technology Department had the authority to perform their own
independent and objective assessment without interference from Internal Audit.
Complainants initial observations of the Collateral Management and Hedging
application internal audit report was that the dollar amount of $308 billion was quite
significant and would cause investor concern given the Respondents conservatorship
status and history with FAS 133 violations. However, SOX Technology Manager Nancy
Hall did not appear to be alarmed or concern.
Complainant explained to Hall that it is common practice to review underlining test
plans, test procedures and any other form of documentation available to ascertain the
nature of the test procedures performed to arrive at conclusions. Complainant pointed out
to Nancy Hall this was an SEC requirement to support SOX Management Testing and
Remediation Status. Complainant continued conversation after returning from vacation
on December 29, 2008.
Factual Allegation No. 35
On or about December 29, 2008, upon Complainants return from vacation she spoke to
Nancy Hall regarding the status of the CMH Internal Audit workpapers. Complainant
indicated due to year end many of the Capital Market personnel whom provided
remediation comments within the CMH Internal Audit report were still on holiday
vacation and would not be expected to return until after New Years Day. Complainant
believed access to the workpapers to understand the underlying issues would help
expedite her discussions with personnel when they returned after New Years.
A number of employees were not available to be contacted to discuss the corrective
action plan they agreed to and the status of that plan due to the holiday season.
Factual Allegation No. 36
On about December 29, 2008, Complainant sent Hall a preliminary email that CMH
Internal Audit findings were still open and unremediated.
Factual Allegation No. 37
During the period December 29, 2009 through January 12, 2009, Complainant met
directly with SOX Manager Nancy Hall to discuss the results of her research based on her
evaluation of the internal audit report and other internal management reports. The
Complainant expressed concerns to SOX Manager Nancy Hall regarding specific risks.
Specifically, Complainant expressed concerns of potential unauthorized system
realignment (correcting) entries due to the numerous deficiencies cited within the Internal
Audit Report.

Complainants Response to Discovery Requests



Complainant also pointed out contradictions with SOX Technology Manager Mike
Gabbay and Bob Leonards claims that the CMH System was SOX Compliant although
Deloitte and the Internal Audit Department disagreed with SOX Technologys
assessment.
SOX Manager Nancy Hall was not receptive to comments and did not respond to
Complainants questions. SOX Manager was annoyed and accused Complainant of
asking too many questions. Complainant stated she could not ethically review deficiency
without adequate supporting documentation as required by SEC regulations.
CMH Pooling System errors could be subject to Financial Accounting Standard 154 for
Accounting Changes and Error Corrections which requires when financial statements are
restated to correct an error, the entity shall restate and disclose that its previously issued
financial statements have been restated, along with a description of the nature of the
error.
Complainant also noted that the CMH System Internal Auditor Report clearly stated
internal control deficiencies related to Access Management, Change Management and
Logging and Monitoring, none of which were later disclosed to SEC in the companys
SEC filings.
SOX Manager reported final status of researched deficiencies to Bob Leonard and Musso
Shaikh. Musso Shaikh was responsible for monitoring SOX findings which posed an
Operational Risk and could potentially impact ORO. Also, Musso Shaikh monitored
various requests involving SOX Remediation for Deloitte.
Factual Allegation No. 38
On or about January 5, 2009 @ 10:01 AM, Nancy Hall attempted to set up an IRB
meeting on January 7, 2009 to expedite discussion of CMH System. Nancy Hall
requested to review CMH without detail research of root causes of material weaknesses
noted within CMH Internal Audit Report to gain an understanding why SOX
Technologys assessment by Mike Gabbay was inaccurate.
Factual Allegation No. 39
On or about January 12, 2009, prior to the IRB meeting Complainant emphasized results
reported to Nancy Hall with verbal additions to what her concerns were. Complainant
objected to Nancy Hall marginalizing her concerns. Complainant expressed to Hall
based on her accounting and IT experience, the issues cited within the CMH internal
audit report indicated there was a possibility that unauthorized adjustments could have
been made could impact our financial statements.
In addition, Complainant provided Nancy Hall a brief overview from a compliance and
regulatory perspective that many of the deficiencies noted in the CMH Internal Audit
Report occurred on a monthly basis (i.e. Pooling General Ledger untimely and missing
account reconciliations for 3 out of 6 months) and that Respondent had the opportunity to
report any information which would notify investors of potential accounting system
Complainants Response to Discovery Requests



problems in current filings such as the 8K current report or 10Q rather than waiting for
the 10K. Complainant stated that SEC filings could have potential disclosure issues if
information was not timely, accurately and completely reported regarding adverse
conditions that prevent the CMH system from recording transactions accurately in the
financial statements.
Factual Allegation No. 40
February 11, 2009, SOX Change Control log indicates production upgrades occurred to
CMH Application although management claimed Hedging Application use was
discontinued in fourth quarter of 2008 in SEC filings. Complainant also noted although a
major system failure occurred with CMH, the majority of remedy CMH SOX change
control tickets were ranked low risk.
Factual Allegation No. 41
February 26, 2009, for the period ending December 31, 2008, Fannie Mae indicated in
SEC Filing that Hedge Accounting use was discontinued in Fourth Quarter 2008 although
system upgrades and builds continued to be performed after application use allegedly was
discontinued.
SEC filing vaguely noted under an unencumbered mortgage balances to the effect
Respondent did not have the technology in place or had designed a system to account for
single-family whole loan inventories. Management also noted that under FHFA
conservatorship, the company had decided to change its focus on volatility and potential
earnings impact.
Complainant believed these statements to investors were misleading in that Respondent
failed to disclose the fact that CMH System was implemented in production during 2008
and a material system failure occurred which prevented management from relying on
SOX system controls as noted within Respondents CMH Internal Audit Report issued on
December 19, 2009.
Factual Allegation No. 42
March 17, 2009, Nancy Hall indicates in email outstanding deficiencies from 2008 which
included CMH. Deficiency number 12042 was assigned to CMH. Nancy Hall noted
within DMS for the following adverse internal condition, based on her review of the
Internal Audit Report that unmonitored user activity in the FAS65 (reference to FAS 65
is an error and should have been CMH) production database is logged but not monitored
by the Central Monitoring team (CMT). Unauthorized changes to production data may
not be detected if activity is not monitored.
Nancy Hall further stated for DMS 12042 (CMH) (Logging & Monitoring) that
Management will establish monitoring requirements and enable monitoring by the CMT.
- completed 12/4/08. The Remediation due date was set for 12/31/2008. Complainant
Complainants Response to Discovery Requests



noted that there were problems across the majority of financial systems related to
Logging and Monitoring and that Capital Markets did not provide proof Logging &
Monitoring deficiencies had been resolved by 12/31/2008 as claimed by Hall. CMH
relied upon the CLAMs system which was determined as of 12/31/2008 to be in
remediation and not a reliable control due to numerous control failures.
Nancy Hall also assigned DMS 12043 for CMH Deficiency. Nancy Hall noted within
DMS the following adverse access control issue existed for CMH: Lack of segregation
of duties Production support for CMH-LA is performed by a single development team
member, which results in key person dependency and a lack of segregation between
development and production.
Nancy Hall indicated the remediation efforts in process for DMS 12043 were as follows:
The developer will train and fully transition production support to the Structured
Transaction Technology production support team by 1/31/09. Remediation due date was
set for 1/31/09.
Complainant noted the 1/31/09 Remediation date for DMS 12043 Segregation of Duties
deficiency was not resolved before the period ending 12/31/2008.
The following SOX Technology team members had knowledge of CMH System
deficiencies: Adams, Arran A; Russell, Michael J, Gabbay, Michael S; Fordham, Edna;
and Crews, Jack, including Complainants report about the same.
Complainant noted within 12/19/2008 CMH Internal Audit report that Capital Markets
Management committed to remediation dates beyond the period ending 12/31/08. Capital
Markets management had the understanding CMH System was going to be in use in 2009
for Hedge Accounting, contrary to comments made in SEC filings that Hedge
Accounting was discontinued during fourth quarter 2007.
As of March 17, 2009, Nancy Hall as the SOX Technology Manager had the
understanding that CMH System was still in use and was being remediated.
Factual Allegation 43
On or about January 5, 2009, Grant Thornton distributed a series of emails confirming
again that Fannie Maes Logging and Monitoring control (CLAMs) continued to fail for
various applications and platforms (Sybase, AutoSys, Unix and Tandem) for SOX 302
Certification testing related to period ending 9/30/2008 and as of 12/31/2008. CLAMs
was determined in 2008 not to be fully remediated or a reliable control based on
discussions with Jack Crews on SOX Technology team meetings.
Complainant noted that management did not disclose in SEC Filings numerous adverse
internal conditions related to Logging and Monitoring in 302 or 404 Certifications.

Complainants Response to Discovery Requests



INTERROGATORY NO. 5: Identify (as that term is defined herein) every person to
whom you criticized Fannie Maes SOX design reviews as being overly focused on
general application controls and not adequately addressing IT application controls as
alleged in Paragraph 26 of the Complaint. Your answer should include: (1) the date each
such criticism was allegedly made; (2) a summary of the criticism that was allegedly
made; and (3) a summary of the discussion that allegedly took place.
RESPONSE: Complainant refers the Respondent to the Answer to Interrogatory No. 3.
INTERROGATORY NO. 6: Identify (as that term is defined herein) every person to
whom you raised concerns that Fannie Maes Management deliberately minimized
and/or withheld information from its Board of Directors and regulators regarding the
severity of risks associated with the SOX IT applications and/or internal controls
applications as alleged in Paragraph 27 of the Complaint. Your answer should include:
(1) the date each such concern was allegedly raised; (2) a summary of the concern that
was allegedly raised; and (3) a summary of the discussion that allegedly took place.
RESPONSE: Complainant refers Respondent to Answer to Interrogatory No. 3 and
Answer to Interrogatory No. 4 which answer this Interrogatory. Complainant has also
disclosed these reports via her retained and forwarded documentation Bates Stamped EF
B.1-B.10 and EF F. 1- F. 8 and the Complainant refers Respondent to the allegations
contained therein as well. Complainant forwarded her concerns about this minimization
and withholding of information which had been expressed to her direct managers as
described above to Slaughter and Fischman on April 27, 2009.
Complainant reported similar concerns as identified in Paragraph 27 of the Complaint to
the individuals from SEC, DOJ, FBI, PCOAB, Congress, FHFA, and OSHA identified in
her Answer to Interrogatory No. 1.
INTERROGATORY NO. 7: Identify (as that term is defined herein) every person to
whom you raised SOX concerns during the week of April 20, 2009, as alleged in
Paragraph 29 of the Complaint. Your answer should include: (1) the date each such
concern was allegedly raised; (2) a summary of the concern that was allegedly raised; and
(3) a summary of the discussion that allegedly took place.
RESPONSE: Complainant refers Respondent to Answer to Interrogatory No. 3 and
Answer to Interrogatory No. 4 which answer this Interrogatory as to SOX concerns.
Complainant has also disclosed these reports via her retained and forwarded
documentation Bates Stamped EF B.1-B.10 and EF F. 1- F. 8 and the Complainant refers
Respondent to the allegations contained therein as well.
Complainant also expressed her concerns during the weekly SOX Technology Meeting
on April 23, 2009 regarding GAPs in the SOX Program and Internal Control Deficiencies

Complainants Response to Discovery Requests

with process documentation for platforms and high risk financial IT Applications. A
series of follow up emails were sent to document discussions on April 23, 2009. The
issues brought to management attention are documented in referenced emails on this day
produced to the Respondent. Managers Mike Gabbay, Nancy Hall, and Stephanie Bahr
were included in the email distribution. SOX Technology personnel Adams, Russell, and
Crews attended the meeting and received a follow up email on discussions.
SOX Technology Managers would not discuss directly the substance of the specific
issues identified within Complainants emails related to internal control deficiencies.
INTERROGATORY NO. 8: Identify (as that term is defined herein) every member of
SOX Technology management to whom you discussed [your] concerns as alleged in
Paragraph 30 of the Complaint. Your answer should include: (1) the date each such
concern was allegedly discussed; and (2) a summary of the discussion that allegedly took
place.
RESPONSE: Complainant objects to this Interrogatory as overly burdensome as it is the
fifth interrogatory asking for the same information. Please see Interrogatory Answers
No. 3, 4, and 7. Complainant has also disclosed these reports via her retained and
forwarded documentation Bates Stamped EF B.1-B.10 and EF F. 1- F. 8 and the
Complainant refers Respondent to the allegations contained therein as well.
INTERROGATORY NO. 9: Identify (as that term is defined herein) every person
whom you claim had knowledge of [your] protected activity as alleged in Paragraph 32
of the Complaint. Your answer should include: (1) a description of the alleged protected
activity about which each such person had knowledge; and (2) the date and manner in
which each such person gained such knowledge.
RESPONSE: Please see Interrogatory Answers No. 3, 4, and 7 for additional information
as for the various times when Respondent gained knowledge of the substance of
Complainants disclosures. Complainant has also disclosed these reports via her retained
and forwarded documentation Bates Stamped EF B.1-B.10 and EF F. 1- F. 8 and the
Complainant refers Respondent to the allegations contained therein as well.
Factual
Allegation
No.

High Level Summary of Complainant's Protected Activities

Dec. 1, 2008, protected activity involving Robert Leonard's 2008
Accountability Survey problems concerns related to SOX Program Design
reviews to determine SOX Compliance. Documented within Performance
Management System.

Complainants Response to Discovery Requests



Factual
Allegation
No.

High Level Summary of Complainant's Protected Activities

December 3, 2008 thru December 12, 2008 protected activity involving
Nancy Hall. Complainant warned Hall not to change SOX Quality Review
results of Grant Thornton's work related to SOX Management Testing to be
reported to Executive Management. Documented via email.

December 19, 2008, Collateral Management and Hedging (CMH) Internal

Audit Report issued - Material System Failure. Nancy Hall.
Between December 19, 2008 thru January 12, 2009 Complainant shared
results with SOX Manager of remediation status. Respondent refused
Complainant access to Internal Audit work papers. Complainant refused to
violate SEC Regulations. Documented via email and direct meetings with
Manager Nancy Hall.

January 12, 2009, Microsoft Outlook Scheduled Meeting via conference

call. Documented via email and direct meetings with Manager Hall.

March 25, 2009, Transcript of protected activity related to Internal Audit

Meeting and disclosure of SOX IT Application risks. Reported externally
authorities. Stephani Bahr attended meeting.

March 25, 2009, Recording of protected activity related to Internal Audit

Meeting and disclosure of SOX IT Application risks. Reported externally
authorities. Stephani Bahr attended meeting.

April 2, 2009, reported protected activity via FNM phone to HR Director

Darlene Slaughter, related to SOX Technology retaliation related to SOX
Violations. Was directed to take remainder of day off.
April 23, 2009, protected activity reporting SOX Program GAPs
communicated by Complainant to Fannie Mae's SOX Technology
Management via several emails. Stephanie Bahr, Nancy Hall and Mike
Gabbay & SOX Technology team members Mike Russell, Arran Adams and
Jack Crews.

10

April 23, 2009, Stephanie Bahr Microsoft Outlook Confirmation for

complainant's protected activity related to SOX Technology's Program
GAPs. Documented via email and direct meetings with Manager.

12

April 23, 2009, Michael S. Gabbay Microsoft Outlook Confirmation for

complainant's protected activity related to SOX Technology's Program
GAPs. Documented via email and direct meetings with Manager.
April 23, 2009, Nancy Hall Outlook Confirmation for complainant's
protected activity related to SOX Technology's Program GAPs.
Documented via email and direct meetings with Manager.

13

April 23, 2009, protected activity initial internal controls deficiencies

reported to SEC. Documented via email and direct meetings with manager.

11

Complainants Response to Discovery Requests



Factual
Allegation
No.

High Level Summary of Complainant's Protected Activities

14

April 23, 2009, fax confirmation for initial protected activity related to
internal controls deficiencies reported to SEC on the same day.

15

April 26, 2009, protected activity reporting of SEC violations to FHFA.

Documented via email and direct meetings with managers.

16

April 27, 2009, protected activity reported to HR and Ethics Compliance.

Documented via email

17

April 27, 2009, Wendy Fischman Microsoft Outlook Confirmation for

protected activity reported to HR and Ethics Compliance

20

April 27, 2009, Darlene Slaughter Microsoft Outlook Confirmation for

protected activity reported to HR and Ethics Compliance.
April 28, 2009, Initial SOX Whistleblower complaint filed to OSHA to
report SOX Violations and Retaliation. HR Darlene Slaughter and Ethics
Compliance Wendy Fischman.
April 29, 2009, Initial SOX Whistleblower complaint follow up call to
OSHA to confirm fax sent the previous day regarding SOX Violations and
Retaliation.

21
22

May 1, 2009 confirmation call to SEC Attorney Leslie Garner related to

protected activity reporting SEC Violations.
May 4, 2009 reporting of SEC violations to SEC.

23

May 6, 2009, protected activity communication from Wendy Fischman of

Fannie Mae Ethics and Compliance Department.

24

May 13, 2009, protected activity communication from OSHA Susan Owen
acknowledging receipt of April 28, 2009 faxed complaint.

25

May 19, 2009, protected activity reporting of SEC Violations to SEC.

Documentary evidence mailed or information provided by call.

18

19

27

May 26, 2009, protected activity reporting of SEC Violations to SEC.

Documentary evidence mailed or information provided by call.
May 27, 2009, protected activity reporting of SEC Violations to SEC.
Incoming Call.

28

June 4, 2009, protected activity reporting of SEC Violations to SEC.

Documentary evidence mailed or information provided by call.
Documentary evidence mailed or information provided by call.

29

July 9, 2009, protected activity reporting of SEC Violations to SEC.

Documentary evidence mailed or information provided by call.

30

July 14, 2009 protected activity reporting of SEC Violations to FHFA via
phone. Call referenced in July 15, 2009 email to FHFA.

31

July 15, 2009 protected activity reporting of SEC Violations to FHFA

Gregory Garner. Documentary evidence mailed or information provided by

26

Complainants Response to Discovery Requests



Factual
Allegation
No.

High Level Summary of Complainant's Protected Activities

call.

INTERROGATORY NO. 10: Identify (as that term is defined herein) every person
whom you claim took the retaliatory actions alleged by you in Paragraphs 34 through 36
of the Complaint, and state the exact date each such retaliatory action was allegedly taken
by that person.
RESPONSE: Complainant identifies the following adverse actions in addition to the
hostile work environment alleged in her complaint.
Fall 2008- March 2009: Complainants input and professional opinion was disregarded
despite her qualifications and professional certifications. Complainant shared during
numerous Team and One on One meetings with SOX Technology her experience to
enhance the efficiency and effectiveness of the SOX Technology Management program.
However, her recommendations were ignored and the SOX Technology Management
group continued with the status quo. Additionally, her SOX concerns were ignored. By
this time, SOX Technology Managers were giving Musso Shaikh, Dave Miller and Arran
Adams consistently better opportunities for exposure and to work on challenging projects
that were denied to Complainant those these workers were not necessarily the most
skillful or knowledgeable with regards to the particular project assigned.
November 2008 - December 31, 2008: SOX Technology Managers Nancy Hall and Mike
Gabbay attempted to pressure Complainant to close open deficiencies without reviewing
underlying supporting documentation to gain an understanding how management reached
test conclusion and final status that deficiency was completely remediated as required by
SOX.
December 1, 2008: Bob Leonard and Nancy Hall refused to allow Complainant to
include personnel whom had a direct knowledge of her performance within her
Accountability Survey as a part of the 2008 Performance Evaluation, which adversely
impacted Complainants ranking among peers.
Dec. 19, 2008- Jan. 12, 2009: Respondent denied access to Internal Audit workpapers
were denied to assist Complainant with researching remediation status between
December 19, 2008 through January 12, 2009. These workpapers would likely reveal
internal control conditions more correctly documented that the final report and would be
critical for Complainant in conducting her review and assessment. Thus both her
performance and her ability to protect the shareholders were adversely impacted.

Complainants Response to Discovery Requests



After her disclosures in 2008, during a subsequent One-on-One meeting in the timeframe
December 3-10, 2008 SOX Technology Manager, Nancy Hall threatened Complainant if
she continued to disclose such matters, that the SOX Technology team would not
like Complainant.
Complainant consistently suffered reprisals by SOX Technology Management and
colleagues as reflected in the anonymous staff feedback documented related to
Complainants 2008 Performance Accountability Survey.
Jan. 2009- Feb. 2009: During months January and February of 2009, prior to
Complainant receiving her Annual Performance Evaluation from 2008, she observed that
SOX Technology Management did not assign her any significant amount of work after
requesting assignments. Complainant reported concerns to HR Darlene Slaughter and
Ethics/Investigation Wendy Fischman that her utilization rate for this period was less
than 25% and provided supporting documentation to substantiate claims. Complainant
requested to be included on prospective new Project for Access Management (i.e. Access
Role Map). Her request was ignored when she approached Mike Gabbay and Bob
Leonard on the issue. Complainant also complained to Bob Leonard that she desired to
have the opportunity to work on a project separate from Arran Adams in order to
demonstrate further her abilities. However, Bob Leonard ignored Complainants request.
Nancy Hall was copied on this email request.
February 18, 2009: Complainant expressed an interest in sitting in on meetings with
Internal Audit. Complainant requested to be included on all meetings pertaining to the
production applications going forward. Respondent refused to allow Complainant in
these meetings.
March 4, 2009: On March 4, 2009, Complainant received an unjustified adverse 2008
Annual Performance evaluation and Memo of Concern from Hall and Leonard. They
placed her on a Corrective Development Plan. In Complainants 2008 Annual
Performance Evaluation, SOX Technology Manager criticized her for not being a team
player. The SOX Technology Management unfairly criticized her for not concealing
known deficiencies. Complainants performance was downgraded and her opportunities
in the department were limited.
March 9, 2009: Complainant was elbowed in the rib by Musso Shaikh after she reviewed
the comments Complainant made pertaining to her Accountability Survey. Complainant
believed the incident was warning to keep her silent regarding the adverse conditions she
observed of which Shaikh also had knowledge.
March 2009- April 2009: Respondent managers disparately harass Complainant for her
use of leave, though she did not act in contravention of company policy and practice. On
March 20, 2009, Respondent accused Complainant of taking unapproved leave. HR
Complainants Response to Discovery Requests



Manager Slaughter denied Complainant the opportunity to review her personnel file
when she requested it on April 18, 2009. During her April 12, 2009 sick leave her
managers continued to harass her. On April 8, 2009, Complainant was accused of taking
unapproved leave from work; her valid medical excuse was refused. On April 13, 2009,
her managers refused her valid medical leave. On April 17, 2009, Complainant was
accused of leaving early without proper authorization. She was subjected to increased
surveillance by SOX Technology Management Team.
April 29, 2009: Fannie Mae HR Director Darlene Slaughter and Joni Veith placed
Complainant on involuntary leave.
April 30, 2009: Respondent interfered with Complainants reporting of fraud concerns to
the Ethics and Compliance Department and Audit Committee on the scheduled
appointment on this day by placing her on involuntary leave via notification from
Darlene Slaughter on April 29, 2009.
July 18, 2009: Complainant was terminated via letter from Darlene Slaughter in whole or
in part because she made protected disclosures.
INTERROGATORY NO. 11: Beginning on July 18, 2009, and continuing up to the
present, enumerate with specificity every source of income of any type received by you
or accruing to you during this period (including, but not limited to, wages, overtime,
unemployment compensation, workers compensation, social security or other similar
payments, and benefits or disability benefits), and with respect to each such source of
income, state the total amount you received or to which you became entitled, and the
inclusive dates on which you received the stated income.
RESPONSE: Pursuant to FRCP, Complainant refers the Respondent to EF F. 2 8/9- 9/9
and adds the following information:

Complainants Response to Discovery Requests



INTERROGATORY NO. 12: Identify (as that term is defined herein) each physician,
surgeon, health care provider, mental health provider, mental health facility or medical
facility who treated or examined you, and each facility where you have received any
treatment or examination, for the alleged severe emotional, mental, and physical
distress suffered by you as a result of the wrongdoing alleged in the Complaint (as
alleged in Paragraph 45 of the Complaint); and state as to each: the date of treatment or
examination, and the injury or condition for which you were examined or treated.

INTERROGATORY NO. 13: Identify (as that term is defined herein) all other
physicians, surgeons, health care providers, mental health providers, mental health
facilities and medical facilities by whom or at which you have been examined or treated
in the past 10 years; and state as to each: the dates of examination or treatment, and the
condition or injury for which you were examined or treated.
RESPONSE: Complainant objects to this interrogatory as overly broad in not limiting
the question to a reasonable timeframe. Subject to and without waiving such objection,
Complainant has previously provided releases for her medical records for the past five
years.
INTERROGATORY NO. 14: Do you contend that you have suffered damages as a result
of the wrongdoing alleged in the Complaint? If so, state the nature and dollar amount of
the damages, and the method that you used for computing the dollar amount.
RESPONSE: Yes, Complainant alleges she has suffered damages as a result of
Respondents wrongdoing.
Complainants Response to Discovery Requests



Complainants Response to Discovery Requests



Complainants Response to Discovery Requests



Served this 22ndday of November 2010 via electronic mail to counsel for Respondent
Damien Stewart.

_____________________
Stephani L. Ayers, Esq.

Complainants Response to Discovery Requests