FBI on Fannie, Freddie and 24 others’ trail

Courtesy of Accountancy Age and The Independent, it seems the FBI is taking a keen interest in the collapse of certain US banks and other financial institutions. Those named so far include Lehman Brothers, AIG, Fannie Mae, Freddie Mac, New Century Financial and Countrywide Financial. According to those reports (The Independent):

Investigators at the FBI are combing documents and emails related to the collapse of Lehman Brothers and AIG and the events leading to the nationalisation of Fannie Mae and Freddie Mac, as they widen the search for executive wrongdoing that may have contributed to the credit crisis…

And the FBI said it had widened an already-sprawling investigation into the crisis..

The FBI has already launched more than 500 prosecutions of players at the sharp end of the mortgage crisis – the mortgage brokers and appraisers who helped foist millions of inappropriate loans on people who could never afford to pay them back. It has 1,400 open investigations…The FBI is examining whether senior executives knew more about the parlous state of their companies’ finances than they let on to the public and to shareholders.

It is serious stuff when the FBI gets involved rather than the SEC which normally handles cases of corporate misfeasance. They must be expecting criminal prosecutions. I note that so far, the Big 4 have escaped attention but I wonder how long it will be before the US government enforcers take a hard look at their activities. I sincerely hope that we don’t see a paper shredding exercise unravel as was the case with Anderson’s in the immediate post-Enron mess. But then history does have a habit of repeating itself.

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Tagged as: American International Group, Countrywide Financial, Fannie Mae, FBI, Freddie Mac, Lehman Brothers