Justice Department to Fannie Mae: Save Accounting Documents

WASHINGTON – One week after Fannie Mae officials testified at a hearing called by the House Financial Services Subcommittee on Capital Market, Insurance, and Government Sponsored Enterprises on accounting and management failure allegations made against the company by the Office of Federal Housing Enterprise Oversight in its recently released report, the U.S. Department of Justice asked Fannie Mae to preserve records relating to its accounting practices as part of a criminal investigation of the company resulting from the allegations by OGHEO of manipulating earnings. In addition, Fannie Mae officials said investors have filed or are preparing eight lawsuits against the company, its chairman and chief executive Franklin Raines, and chief financial officer J. Timothy Howard. According to Fannie Mae, the suit generally alleges that Fannie Mae’s accounting practices violated federal securities laws. Another suit filed against members of Fannie Mae’s board alleges a “breach of fiduciary duties.”