US mortgage giant Fannie Mae has been hit with a $400m (£212m) fine for an accounting scandal.

The firm, which reportedly altered earnings to trigger management bonuses, was heavily criticised in a report by the Office of Federal Housing Enterprise Oversight (OFHEO) and the Securities & Exchange Commission for its ‘unethical corporate culture’.

‘The penalty and settlements represent a major step in correcting a dangerous course that had been followed by one of the largest financial institutions in the world,’ said acting OFHEO director James Lockhart.

‘Unprincipled corporate behaviour and inadequate controls will simply not be tolerated,’ Lockhart added.

Several directors quit following the scandal breaking including the CEO and CFO.

‘We are glad to resolve these matters,' said Daniel H Mudd, president and CEO of the company. 'We have all learned some powerful lessons here about getting things right and about hubris and humility. We are a much different company than before. But we also recognise that we have a long road ahead of us.’