SEC Poised to Charge Fannie, Freddie Execs

But regulatory agency disagrees, and nothing has yet been filed
By Evann Gastaldo,  Newser Staff
Posted Mar 18, 2011 8:30 AM CDT
SEC Poised to Charge Fannie Mae, Freddie Mac Executives, but Federal Housing Finance Agency Disagrees: Sources
In this July 11, 2008 file photo, a sign in front of the Fannie Mae headquarters in Washington is seen.   (AP Photo/Manuel Balce Ceneta, File)

The SEC is making moves toward charging current and former Fannie Mae and Freddie Mac executives, sources tell the Washington Post, but the Federal Housing Finance Agency disagrees with the move. The SEC has sent notices to at least four senior executives over the past eight weeks warning them they may face civil charges, although nothing has been formally filed and the SEC could still change its mind. The executives would be charged with violations related to the housing market collapse, including a failure to provide investors with necessary information about the companies' mortgage holdings.

The SEC alleges that investors were misled about the danger of various mortgage products: The Fannie execs allegedly mischaracterized risky loans as “prime,” while the Freddie execs allegedly failed to fully warn investors about subprime loan risks. The FHFA, the regulator that oversees both companies and reviewed the financial disclosures in question, believes the disclosures were sufficient; a source says the agency has sent a letter to the SEC stating its opposition to the potential charges. (Read more Securities and Exchange Commission stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.