Federal regulators have charged six former executives — including former CEOs — at mortgage giants Fannie Mae and Freddie Mac with securities fraud, alleging they misled investors about their exposure to risky subprime mortgage debt.
The Securities and Exchange Commission said it sued three former executives at Fannie Mae and three at Freddie Mac Friday. The civil charges were filed in two separate lawsuits in federal court in New York City. Among those charged were former Freddie Mac CEO Richard Syron and former Fannie Mae CEO Daniel Mudd.
“Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was,” said Robert Khuzami, Director of the SEC’s Enforcement Division. Khuzami added that these misstatements “misled the market about the amount of risk on the company’s books.”
The SEC said both firms have agreed to cooperate with the agency and have entered into non-prosecution agreements.
“Non-prosecution agreements” = “undisclosed settlement”. What will it take to get these people in jail already? –ed