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No criminal charges for Fannie Mae
By ASSOCIATED PRESS
Published August 25, 2006
WASHINGTON - Fannie Mae, the government-sponsored mortgage-lending giant that finances one of every five U.S. home loans, won't face criminal charges over its multibillion-dollar accounting irregularities, the U.S. Attorney's Office said Thursday after two years of investigation. In May, the company was fined a record $400-million in a civil settlement with the Securities and Exchange Commission and the Office of Federal Housing Enterprise Oversight over accounting problems and what regulators said was earnings manipulation by the company. A report issued by OFHEO said Fannie Mae employees manipulated accounting to hit quarterly earnings targets so that senior executives could pocket hundreds of millions in bonuses from 1998 to 2004. While it has reached a settlement with the company, the SEC still could bring civil actions against executives, with the burden of proof less stringent than in criminal prosecutions. This month, Fannie Mae said it hoped to complete a multibillion-dollar restatement of its 2004 earnings by the end of this year. The earnings correction is expected to reach about $10-billion.
[Last modified August 24, 2006, 23:01:03]
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