SEC Slaps Former Fannie, Freddie Execs With Fraud Charges
It’s a start, but let’s hope Friday’s fraud charges against six former higher-ups at Fannie Mae and Freddie Mac don’t represent the only attempts that the Securities and Exchange Commission will make to hold financial executives responsible for the disastrous economic mess that’s still upon us. –KA
AP via Google News:
Two former CEOs at mortgage giants Fannie Mae and Freddie Mac on Friday became the highest-profile individuals to be charged in connection with the 2008 financial crisis.
In a lawsuit filed in New York, the Securities and Exchange Commission brought civil fraud charges against six former executives at the two firms, including former Fannie CEO Daniel Mudd and former Freddie CEO Richard Syron.
The executives were accused of understating the level of high-risk subprime mortgages that Fannie and Freddie held just before the housing bubble burst.
“Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was,” said Robert Khuzami, SEC’s enforcement director.