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US jury probes activities at Fannie Mae, Freddie Mac.

Global Banking News-30 September 2008-US jury probes activities at Fannie Mae, Freddie Mac(C)2008 ENPublishing - http://www.enpublishing.co.uk

Global Banking News - 30 September 2008(c)2005 - Electronic News Publishing - http://www.enpublishing.co.uk

A US grand jury is investigating accounting and disclosure issues at giant mortgage finance companies Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).

Freddie Mac said that the government investigation focuses on activities starting in 2007. The two companies, which have received subpoenas from the US Attorney's office in Manhattan on Friday as well as requests from the Securities and Exchange Commission to preserve documents, said that they would co-operate fully.

Fannie Mae and Freddie Mac were taken over by the government earlier this month with a rescue plan that could require the Treasury Department to inject nearly USD100bn into each, as their rising defaults and foreclosures threatened the entire mortgage market.

Law enforcement officials have also said last week that the FBI is looking at potential fraud by Fannie Mae, Freddie Mac and insurer American International Group Inc (NYSE: AIG), including individuals who ran them.

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Publication:Global Banking News (GBN)
Date:Sep 30, 2008
Words:206
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