Fannie Mae and Freddie Mac disclosed they have received grand-jury subpoenas from federal prosecutors seeking information on the companies' accounting, disclosures and corporate-governance matters. Federal prosecutors from U.S. Attorney for New York's southern district delivered the subpoenas Friday, the two companies said in corporate filings. The companies are already the subject of investigations by the Securities and Exchange Commission.
The two companies have been in the conservatorship of their regulator, the Federal Housing Finance Agency, since the government seized the giants of the mortgage industry. The government intervention has raised pressure on the Bush administration to hold accountable the companies and top executives who oversaw the companies during their years of growth.
Two other companies that have been at the center of the financial markets turmoil in recent weeks, Lehman Brothers Holdings Inc. and American International Group Inc. are also under investigation by federal prosecutors.
In a filing, Fannie disclosed the subpoena and that it had received "a request for preservation of documents related to the inquiry from the Staff of the SEC." The company said it expects the SEC to issue a request for documents. Fannie Mae said it "intends to cooperate fully with these investigations and inquiries."
Freddie Mac, in a statement, said its grand-jury subpoena "seeks documents relating to accounting, disclosure and corporate governance matters for the period January 1, 2007 to the present. Freddie Mac will cooperate fully in these matters."
The investigation into Fannie and Freddie is part of a wider move by federal law enforcement to probe the roots of the financial troubles ailing Wall Street and the housing market.
The Federal Bureau of Investigation has ongoing investigations into 26 companies, in addition to more than 1,400 mortgage-fraud investigations around the country.
