Ex-Fannie CEO Loses Bid To Toss SEC Suit

Law360, New York (August 10, 2012, 6:36 PM EDT) -- A federal judge ruled Friday that a U.S. Securities and Exchange Commission lawsuit against former Fannie Mac CEO Daniel Mudd could go forward, saying Fannie had misled investors about its exposure to subprime mortgages during Mudd's tenure.

The mortgage financing company's financial statements failed to count several risky types of loans in its portfolio as subprime, giving investors a misleading picture of its finances, U.S. District Judge Paul Crotty said in a written order.

The SEC brought its suit in December after Fannie was hammered by...
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