Freddie, Fannie accounting under legal scrutiny

US mortgage lenders Freddie Mac and Fannie Mae, which were taken over by the government earlier this month, have been subpoanaed by the US Attourney’s office at the request of the Securities and Exchange Commission (SEC).

The groups said yesterday a federal grand jury in New York was investigating the mortgage lenders accounting, disclosure and corporate governance issues, according to The Associated Press.

In addition to the subpoenas the groups received requests from SEC that they preserve documents.

Freddie Mac said in a statement the probe would focus on activities started in 2007, however the companies' bookkeeping has long been questioned and several years ago, both Fannie and Freddie were forced to restate billions in earnings after federal regulators discovered accounting irregularities at both companies.

Further reading:

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