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Fannie, Freddie disclose subpoenas, investigations
2008-09-29
WASHINGTON - A federal grand jury is investigating accounting and disclosure issues at Fannie Mae and Freddie Mac, the mortgage finance companies said Monday. Fannie and Freddie said they received subpoenas Friday from the U.S. Attorney's office in Manhattan as well as requests from the Securities and Exchange Commission that they preserve documents. Fannie Mae and Freddie Mac were taken over by the government earlier this month as their mounting defaults and foreclosures threatened the entire mortgage market. The investigation concerns accounting, disclosure and corporate governance matters, the companies said. Freddie Mac said in a statement said the government investigation focuses on activities starting in 2007. Both companies said they would cooperate fully in the investigations, but their spokesmen declined to comment Monday. Three weeks ago, the government seized control Fannie Mae and Freddie Mac, the two biggest U.S. mortgage finance companies, with a rescue plan that could require the Treasury Department to inject as much as $100 billion into each to keep them afloat. Law enforcement officials said last week the FBI is looking at potential fraud by Fannie, Freddie, and insurer American International Group Inc. Additionally, a senior law enforcement official told said failed investment bank Lehman Brothers Holdings Inc. also is under investigation. The inquiries will focus on the financial institutions and the individuals that ran them, the senior law enforcement official told the Associated Press last week. Officials said the new inquiries bring to 26 the number of companies connected to the mortgage crisis under investigation over the past year. Over the past year as the housing market cratered, the FBI has opened a wide-ranging probe of companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors. FBI Director Robert Mueller has said the FBI's hunt for culprits in the U.S. subprime mortgage crisis focused on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments. Additionally, the FBI is investigating failed bank IndyMac Bancorp Inc. for possible fraud. Countrywide Financial Corp., formerly the largest U.S. mortgage lender and now owned by Bank of America Corp., is also under scrutiny.
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 Fannie, Freddie execs turned aside warnings (2008-12-09) | | Former Fannie Mae, Freddie Mac execs to testify (2008-12-09) | | Freddie seeks gov't aid after $25.3B loss (2008-11-14) | | Fannie Mae posts $29B loss, may tap gov't funding (2008-11-10) |  Fannie, Freddie disclose subpoenas, investigations (2008-09-29) | | With finance crisis, hands-off era over (2008-09-17) | | Lehman: The next bailout? (2008-09-13) | | Fannie, Freddie rescue binds taxpayers to housing market (2008-09-09) | | Congress weighs the fate of Fannie, Freddie (2008-09-09) | | Mortgage rates drop after Fannie, Freddie takeover (2008-09-08) | | Fannie and Freddie: why the takeover (2008-09-08) | | Fannie, Freddie deal helps some borrowers, not all (2008-09-08) | | World stocks surge on US mortgage rescue plan (2008-09-08) | | Wall Street soars on Fannie, Freddie bailout (2008-09-08) | | China and Japan hail U.S. mortgage rescue as doubts linger (2008-09-08) | | US government takes on big role in mortgage market (2008-09-08) | | World stocks soar after Freddie, Fannie bailouts (2008-09-08) | | US Government seizes control of mortgage giants (2008-09-07) | | Battered stocks face another tough week (2008-09-07) | | US takes over Fannie, Freddie in bid to ease finance crisis (2008-09-07) | | Obama: Recession could delay rescinding tax cuts (2008-09-07) | | Candidates weigh in on stabilizing Fannie, Freddie (2008-09-06) | | Government may soon back troubled mortgage giants (2008-09-06) | | McCain backs government takeover of mortgage giants (2008-09-06) | | Fannie, Freddie blind to the bubble (2008-09-06) |
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