Fannie Mae Settles Fraud Charges For $400M

Law360, New York (May 23, 2006, 12:00 AM EDT) -- Mortgage giant Fannie Mae has agreed to pay $400 million in a settlement with the Office of Federal Housing and Enterprise Oversight and the U.S. Securities and Exchange Commission, settling allegations of accounting fraud at the government-sponsored company.

Fannie Mae and the two agencies reached the settlement just as OFHEO released a report detailing the fraud, which the agency claims allowed executives to increase their personal bonuses by incorrectly reporting earnings.

Along with the report, OFHEO offered a scathing commentary on the state of Fannie’s finances....
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