Auditor KPMG this week sued its former client Fannie Mae, alleging that the giant mortgage funding company deceived it for years, damaging KPMG's reputation and exposing it to the threat of substantial liability. Both firms have been sued by investors since Fannie Mae was revealed to have overstated profits by billions of dollars. For years, KPMG put its stamp of approval on financial statements that Fannie Mae now acknowledges were flawed. In court papers filed in U.S. District Court for the District of Columbia, KPMG also disclosed that it has become the subject of regulatory inquiries. The accounting firm says...
