Just weeks after the government stepped in and took control of the country’s largest mortgage financiers, the two companies, Freddie Mac and Fannie Mae have received federal grand jury subpoenas from the U.S. Attorney’s Office for the Southern District of New York. The Department of Justice is calling for documents relating to the companies’ accounting, disclosure, and corporate governance matters from January 1, 2007 to the present.

The government-sponsored enterprises (GSEs) also received notices from the enforcement division of the Securities and Exchange Commission (SEC) indicating that the agency is conducting an inquiry into their business practices and instructing the entities to preserve all documentation.
Both institutions have said they will cooperate fully with officials and investigators.
In his statement earlier this month, announcing conservatorship of the two institutions, James B. Lockhart, director of the Federal Housing Finance Agency (FHFA), said, “Over the last three years OFHEO [Office of Federal Housing Enterprise Oversight], and now FHFA, have worked hard to encourage the enterprises to rectify their accounting, systems, controls and risk management issues.” Freddie Mac and Fannie Mae each faced allegations related to their accounting standards during the most recent housing boon, both shelling out billions to remedy questionable internal procedures and practices.
As DSNews.com reported last week, Freddie and Fannie are just two of more than 20 companies being investigated by the FBI for corporate fraud, and being labeled as the parties responsible for the nation’s current economic upheaval.