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

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

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