Fannie Mae and Freddie Mac chiefs could face charges
Thursday 17 March 2011
The former chief executives of the US mortgage finance giants Fannie Mae and Freddie Mac could become the next senior figures facing fraud charges, as regulators pursue wrongdoing in the lead up to the credit crisis.
Richard Syron, who ran Freddie Mac until it was taken over by the US government in September 2008, has received notification from the Securities and Exchange Commission that it is planning to file civil charges alleging that Mr Syron's firm misled investors over its exposure to subprime mortgages, it emerged yesterday.
The notification came in the form of a so-called Wells notice, to which Mr Syron is given the opportunity to respond before charges are filed. Daniel Mudd, the former Fannie Mae chief executive, who now runs the hedge fund group Fortress, disclosed earlier this week that he too has received a Wells notice.
The forced nationalisation of Fannie Mae and Freddie Mac marked the start of the most tumultuous period of the credit crisis, coming just a week before Lehman Brothers went bankrupt.
The two companies operated with an implicit government guarantee in return for helping to promote homeownership among lower-income Americans, and because they owned or guaranteed the majority of US mortgages. They were deemed too big to fail by the Bush administration.
Under public conservatorship, the two firms have continued to require infusions of taxpayer funds in order to pay their debts. The SEC has been investigating whether Fannie and Freddie's public statements properly reflected the risks that the two firms were taking.
Both Mr Mudd and Mr Syron said that charges against them would be without merit.
- 1 BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
- 2 Number of young homeless people in Britain is 'more than three times the official figures'
- 3 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 4 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
- 5 Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Number of young homeless people in Britain is 'more than three times the official figures'
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...