Justice Probes Possible Accounting Fraud at Fannie Mae
September 30, 2004: 4:16 a.m. EST
-
NEW YORK -- The Justice Department opened an investigation of possible accounting fraud at Fannie Mae (FNM) in the wake of a federal regulator's report that the mortgage company may have manipulated its books to meet earnings targets, Thursday's Wall Street Journal reported.
The criminal investigation is the latest in the government's intensifying scrutiny of the fourth-largest U.S. financial-services company. It follows an agreement between Fannie Mae and its regulator, the Office of Federal Housing Enterprise Oversight, or Ofheo, that reins in the company's explosive growth and forces it to increase capital reserves.
Federal regulators last week accused the company of manipulating its results in recent years - in one instance allowing senior executives to get multimillion-dollar bonuses. Parts of their report also suggested that some Fannie Mae executives may have misled regulators, which in some instances would be a criminal offense.
Justice Department officials concluded that the regulator's disclosures demanded an investigation, despite their concerns that a criminal inquiry could rattle the markets, lawyers close to the case said.
Ofheo referred its report to prosecutors last week, the lawyers close to the case said. The report raised questions of possible accounting manipulations involving financial instruments used to hedge risk, and expensing of costs associated with the company's core business of buying home mortgages from lenders around the country. Ofheo said that its investigation is continuing, suggesting that other accounting issues could emerge.
Chuck Greener, chief spokesman for Fannie, said the company "doesn't have any knowledge of a DOJ [Department of Justice] preliminary criminal investigation and so can't comment further."
Scores of investigations of alleged corporate fraud have been opened in the past three years, and despite several high-profile cases, not all of them have resulted in criminal charges.
Wall Street Journal Staff Reporters John R. Wilke, John D. McKinnon, James R. Hagerty and Dawn Kopecki contributed to this article.
Dow Jones Newswires 09-30-04 0416ET Copyright (C) 2004 Dow Jones & Company, Inc. All Rights Reserved.
Justice Probes Possible Accounting Fraud at Fannie Mae
notíCIas_pt
19
30-09-2004 06:29
Disclaimer:
O Clubeinvest.com informa que nenhuma da informação
aqui facultada deverá ser entendida como conselho ou recomendação
de qualquer tipo de transacção ou investimento.
