Fannie Mae, Freddie Mac Disclose Subpoenas, Investigations Into Accounting Practices
Sep 30, 2008 (financialwire.net via COMTEX) --
Companies: American International Group, Inc. (AIG), Fannie Mae (FNM), Freddie Mac (FRE), Lehman Brothers Holdings, Inc. (LEH), Lehman Brothers Holdings, Inc. (LEHMQ)
September 30, 2008 (FinancialWire) -- Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) said that a federal grand jury in New York is investigating accounting, disclosure and corporate governance at both companies.
Last week, law enforcement officials said that the FBI is looking at potential fraud by Fannie, Freddie, and insurer American International Group Inc. (NYSE: AIG) and failed investment bank Lehman Brothers Holdings Inc. (NYSE: LEH) is also under investigation.
Fannie and Freddie said they received subpoenas 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.
Freddie Mac said that the government investigation focuses on activities starting in 2007.
The companies have faced criticism for their accounting practices before. Several years ago, both Fannie and Freddie were forced to restate billions in earnings after federal regulators discovered accounting irregularities at both companies.
The scandals led to the replacement of the companies' top executives. Freddie Mac's former CEO, Gregory Parseghian was ousted in December 2003. Fannie CEO Franklin Raines and chief financial officer Timothy Howard were swept out of office a year later.
FinancialWire" is a fully independent, proprietary news wire service of Investrend Information (a division of Investrend Communications, Inc.). FinancialWire" news is written by professional journalists, dedicated to pure journalistic standards. FinancialWire" does not receive or accept any compensation from any individual or subject company (or representative thereof) for its news or opinions. All FinancialWire" news is available at http://www.financialwire.net . Please address any inquiries to feedback@financialwire.net .
Free annual reports for companies mentioned in the news are available at http://investrend.ar.wilink.com/?level=279 .
http://www.financialwire.net
Copyright (C) 2008 Investrend. All rights reserved
News Provided by COMTEX
Companies: American International Group, Inc. (AIG), Fannie Mae (FNM), Freddie Mac (FRE), Lehman Brothers Holdings, Inc. (LEH), Lehman Brothers Holdings, Inc. (LEHMQ)
Related terms: accounting, ceo, communications, corporate, earnings, fannie mae, federal, freddie mac, insurance, investigation, investment bank, law enforcement, market, mortgage, new york, nyse, standards
