Fannie Mae, KPMG Slam Investors' Accounting Fraud Claims

Law360, Washington (June 5, 2012, 7:16 PM EDT) -- Fannie Mae and auditor KPMG LLP on Tuesday told a Washington federal judge that the mortgage giant's $12 billion worth of accounting mistakes don't amount to securities fraud, despite allegations by shareholders in long-running securities multidistrict litigation.

While the shareholders alleged that Fannie Mae violated Financial Accounting Standard 133 and intentionally manipulated its hedge transaction accounting to reflect illusory profits, counsel for Fannie Mae and KPMG noted that third parties in the industry, including the U.S. Securities and Exchange Commission, have backed up the firm's accounting...
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