FBI Investigating GSEs, AIG, Lehman

September 24, 2008 No Comments »


The FBI is investigating Fannie Mae, Freddie Mac, AIG, and Lehman Brothers for potential fraud, according to the AP.

While the government agency didn’t disclose the names of the firms it was investigating, a source close to the situation noted that it made sense to look at recently collapsed companies.

Specifically, it is believed the FBI is looking into whether these companies deliberately misled shareholders and the general public about their financial health.

FBI officials disclosed yesterday that a total of 26 corporate fraud investigations were underway, up from 24 a week ago and 21 as recently as July.

In addition to those cases, the agency said it had roughly 1,400 open investigations underway focused on smaller businesses and individuals suspected of mortgage fraud.

A number of companies and CEOs have come under fire in recent months for their part in the mortgage crisis, but few have actually been prosecuted.

Back in mid-June, “Operation Malicious Mortgage” netted 144 mortgage fraud cases involving 406 defendants who were eventually charged.

Around that same time period, former Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin were indicted for mortgage securities fraud.

Earlier this month, Fannie Mae and Freddie Mac went into government conservatorship, AIG got bailed out by the government, and Lehman Brothers was forced into bankruptcy.

The move by the FBI comes amid increased scrutiny from industry watchdogs and the general public demanding more corporate accountability.

(photo: carbonnyc)

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