Two Fannie Mae executives resign
Two senior executives at Fannie Mae, the giant US mortgage provider, have resigned in the wake of criticisms over accounting irregularities.
Chief executive Franklin Raines and chief financial officer Tim Howard have left the company, America’s second-largest financial institution.
Fannie Mae – which supplies funds to America’s $8 trillion mortgage market – could have to restate its earnings by up to $9bn (£4.6bn) as a result of investigations by US financial regulators.
Last week, the Securities and Exchange Commission, said the company had made serious errors in its financial reporting, and was found to have violated rules relating to derivatives and some pre-paid loans.
The US financial regulator said Fannie Mae would need to raise substantially more capital to restore its balance sheet.
According to a BBC website, KPMG will also be replaced as the company’s auditor.