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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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From: Paul Kern8/24/2006 9:36:25 AM
   of 110194
 
DJ Fannie Mae Says Justice Dept Says Probe Is Discontinued



By Damian Paletta

Of DOW JONES NEWSWIRES


WASHINGTON (Dow Jones)--The Justice Department has notified Fannie Mae (FNM) that it had "discontinued" its two-year investigation into the company, the mortgage giant announced Thursday, but it is unclear whether former and existing executives could face individual charges.

Fannie Mae announced that the U.S. Attorney's Office for the District of Columbia has said it "does not plan to file charges against the company."

A Justice Department spokesman was not immediately available for comment.

Fannie Mae said it was initially notified of the investigation in October 2004. In May, the SEC and the Office of Federal Housing Enterprise Oversight fined Fannie Mae $400 million for its accounting problems, alleging that that senior executives manipulated earnings to trigger millions of dollars in bonuses.

Securities and Exchange Commission Chairman Christopher Cox has labeled the accounting mistakes as fraud, a warning sign that charges could eventually come against individuals.

"We will continue to work closely and cooperatively with our regulators as we move forward to carry out the terms of our agreements, complete our restatement and build a better company," Fannie Mae president and chief executive Daniel H. Mudd said in a press statement released Thursday.


-By Damian Paletta, Dow Jones Newswires; 202-862-9241; Damian.Paletta@dowjones.com


(END) Dow Jones Newswires

08-24-06 0934ET
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