KPMG Sues Fannie Mae Over Misrepresentations

Law360, New York (April 23, 2007, 12:00 AM EDT) -- Mortgage giant Fannie Mae intentionally withheld information from auditor KPMG, causing the accounting firm to approve financial reports that it otherwise would not have, according to a new lawsuit filed against Fannie Mae by KPMG.

The lawsuit, filed Friday in the U.S. District Court for the District of Columbia, accuses Fannie Mae of breach of contract and fraudulent misrepresentation, and alleges that the government-sponsored mortgage lender “repeatedly, deliberately, and recklessly provided misleading information to KPMG.”

The accounting firm claims that in reviewing Fannie Mae’s financial statements,...
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