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U.S. securities regulators sued six former executives at Fannie Mae and Freddie Mac on Friday, including ex-CEOs of both mortgage finance companies, saying they misled investors over exposure to risky home loans.
The U.S. Securities and Exchange Commission sued three former executives at Fannie Mae and three at Freddie Mac. The civil charges were brought in two separate lawsuits filed in U.S. District Court in Manhattan.
The SEC accused former Fannie Mae CEO Daniel Mudd, former Freddie Mac CEO Richard Syron and four other defendants of knowingly approving false statements to investors that drastically misrepresented the extent of the firms' exposure to toxic mortgages.
Spokesmen for Mudd and Syron did not immediately respond to requests for comment.
Freddie Mac and Fannie Mae have been propped up by $169 billion in federal aid since they were rescued by the government in 2008.
The cases are SEC v. Daniel Mudd et al., No. 11-9202 and SEC v. Syron et. al No. 11-9201, U.S. District Court for the Southern District of New York.
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."
Originally posted by THE_PROFESSIONAL
I wonder what newt will have to say about this
He new this was coming.
Originally posted by Afterthought
reply to post by macman
He new this was coming.
I have a feeling that many are retiring for just this reason. It seems as though a lot of high profile people in the government are beginning to retire as if this will help them. I wonder if any are planning on retiring to South America?
The SEC said that Ruettiger agreed to pay $382,866 without admitting or denying the allegations. Ten other associates of Ruettiger also settled charges, while litigation continues against two others.
The SEC charges that Ruettiger and his associates participated in a so-called a "pump-and-dump" scheme to inflate the value of the stock of his sports drink company in 2008. It said the scheme generated more than $11 million in illicit profits.