Fannie and Freddie owned up to getting federal grand jury subpoenas on Friday and being the subject of an SEC investigation. Looks like the law enforcement business doesn’t have to worry about a slowdown!
Bloomberg: The subpoenas request documents related to accounting, disclosure and corporate governance, Fannie and Freddie said in separate statements. Freddie said the investigation seeks papers dating back to Jan. 1, 2007.
Fannie and Freddie are among 26 companies being investigated by the Federal Bureau of Investigation for possible accounting misstatements in a probe of the subprime-mortgage market collapse, a senior law-enforcement official said this month. Federal agencies have come under pressure by lawmakers to hold companies responsible for the loan crisis that rocked Wall Street and led to the biggest housing slump since the 1930s.
…Reviews of Fannie and Freddie‘s books in the weeks leading up to the Sept. 7 takeover found that some accounting methods the companies were using obscured the “low quality” of capital reserves. The Federal Bureau of Investigation has already begun looking into possible accounting misstatements at Fannie, Freddie and 24 other companies in a probe of the subprime-mortgage market collapse, a senior law-enforcement official said this month.
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