Posted on 09/29/2008 5:32:36 PM PDT by Brytani
(RTTNews) - Mortgage giants Fannie Mae (FNM | Quote | Chart | News | PowerRating) and Freddie Mac (FRE | Quote | Chart | News | PowerRating), who were taken over by the U.S. government earlier this month, said Monday that they have received federal grand jury subpoenas and that they are the subject of a probe by the U.S. Securities and Exchange Commission.
Freddie Mac said it received a grand-jury subpoena from the United States Attorney's Office for the Southern District of New York, seeking documents relating to accounting, disclosure and corporate-governance matters for the period from January 1, 2007, to the present.
The company also said it has received a notice that the SEC is conducting an inquiry, and that it has directed the company to preserve documents.
In a regulatory filing, larger rival Fannie Mae said that it has received notice of ongoing federal government investigations and inquires by the United States Attorney for the Southern District of New York and the SEC.
Both companies said they will fully cooperate fully in the enquiries.
Earlier this month, the U.S. government took over control of Freddie Mac and Fannie Mae in a move to bolster the housing markets and protect the financial system. The companies have lost billions of dollars on bad mortgages and accounting scandals. The companies are now operating under a conservatorship.
The FBI said last week it was expanding its probe of possible corporate fraud related to the U.S. mortgage market collapse to include Fannie Mae, Freddie Mac, Lehman Brothers Holdings Inc and insurer American International Group.
The FBI is also investigating failed bank IndyMac Bancorp Inc. for possible fraud. Countrywide Financial Corp., which was acquired by Bank of America Corp., is also under scrutiny.
The mortgage crisis has so far had devastating effects on the U.S. financial sector, which awaits the proposed $700 billion government rescue plan to help avoid what President George W. Bush called an economic calamity. Earlier this year, the near collapse of Bear Stearns prompted the U.S. Federal Reserve to broker a deal under which the investment bank was sold to JPMorgan Chase & Co. (JPM | Quote | Chart | News | PowerRating). The scenario worsened earlier this month when the government took over mortgage giants Fannie Mae and Freddie Mac. Subsequently, Bank of America agreed to buy Merrill Lynch & Co. for $50 billion. However, the biggest shocker was the collapse of the 158-year old Lehman Brothers, which filed for bankruptcy protection. The financial sector avoided a major crisis with the government's $85 billion bailout of insurer American International Group, Inc. (AIG | Quote | Chart | News | PowerRating). Last week, regulators seized Washington Mutual Inc. and then sold the thrift's banking assets to JPMorgan Chase & Co. for $1.9 billion, thus making it the biggest bank failure in the U.S. history. And on Monday, Citigroup Inc. agreed to acquire the banking operations of Wachovia Corp. in a deal facilitated by the Federal Deposit Insurance Corp.
Freddie Mac shares are currently trading at $2.21, up 20 cents or 10.00%, while Fannie Mae shares are currently trading at $1.89, up 6 cents or 3.28%.
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For full details on Fannie Mae (FNM) click here. Fannie Mae (FNM) has Short Term PowerRatings of 4. Details on Fannie Mae (FNM) Short Term PowerRatings is available at This Link.
If we lived in an honest country another Club Fed would need to be built to hold all of those who have caused the current fiancial crisis.
Who’s probing? The foxes in the hen house?
Bale em now and the corruption will just continue.
The Dhims just can’t keep their mitts out of the coffers.
his weak leadership and wimpy attitude all the while smiling his brains out.....Lord help us....
he fought terrorism and gave us two good judges....I'll give that to him...
We dont want to go back too far.....that might make some people look bad..... ;)
If this “probe” is done right, the Republicans have won the election.
Don’t worry, they’ll find a Republican to prosecute.
Gee, all the way back to 2007? WTF?
Problem is America wont be fully exposed to the truth until after the election.
It should go back to at least 1995 with Clinton’s amendments to the CRA.
They will never know the truth.
Yea, real effective. Gives plenty of cover for the democrats. The damage was done long before 2007. If the DOJ wanted to do the job correctly for the American people who were betrayed, they would start at ground 0 with Jimmie Carter in I believe 1977
Could be another reason the Feds took control of the chicken house. They can control and manage the process to protect themselves.
The probe the Dimms didn’t want back in 2003-2004?!?
“CYA mode.....when Bush is gone, it’ll be a happy day in the usa....his weak leadership and wimpy attitude all the while smiling his brains out.....Lord help us....he fought terrorism and gave us two good judges....I’ll give that to him... “
Up until this week I was convinced Bush would launch crippling attacks against Iran before he left office.
I’m not convinced anymore.
We can only hope that in the end, Franklin Delano Raines, Jamie Gorelick and Jim Johnson be held accountable and get everything that is coming to them. Raines did have to pay $24 million to stay out of jail. Heads should roll.
That’s about all he gave us.
Unfortunately I think if McCain is elected, his desire for bi-partisanship, will not allow his administration to pursue this investigation.
Still, I’ll take him over Obama any day of the week.
No, (without laying blame) it needs to start in ‘68, when it was floated with CEO and stock. “Fannie Mae” started in 1938, when the government backed loans for banks during the depression.
What happened to Ginnie Mae, btw, anyone know?
It won’t be done before the elections.
In fact, I doubt a single indictment will happen (if any at all) before 2010.
It’s been 5 years since the billion dollar scandal at Fannie and nothing has been done.
>> I’m not convinced anymore
reality is better than fiction, it could be genius (but unlikely)
I have no illusions there are some Republicans that are as dirty, I’d bet this investigation will attempt to be so bipartisan they’ll have to find a Rep for every Dem or won’t indict at all.
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