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Fannie and Freddie Being Investigated

Published 09/30/08 Dustin Ensinger - Print Article
E-mail - editor@economyincisis.org

The Department of Justice and the Security and Exchange Commission have both began probes into the accounting, disclosure and corporate governance matters of mortgage giants Fannie Mae and Freddie Mac. Both companies were seized by the government three weeks ago after suffering billions in losses due to the subprime mortgage crisis.

The United States attorney’s office for the Southern District of New York asked a grand jury to issue the mortgage behemoths subpoenas on Friday. The Security and Exchange commission has ordered the companies to preserve all documents relating to the cases. The probe goes back to Jan. 1, 2007.

The FBI is also investigating the practices of American International Group and Lehman Brothers as part of a probe into the current financial crisis. In addition, another 24 companies are being investigated.

Both Fannie Mae and Freddie Mac have agreed to fully cooperate.

Source The New York Times:

Fannie Mae and Freddie Mac, the mortgage finance giants that were taken over by the government this month, said Monday that they were subpoenaed for documents as part of federal grand jury investigations into their accounting.

The United States attorney’s office for the Southern District of New York subpoenaed the two companies on Friday for documents related to accounting, disclosure and corporate governance dating from Jan. 1, 2007, to the present.

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