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Fannie Mae To Pay $400M Penalty

WASHINGTON, DC-In the combined agreements with OFHEO and the SEC, the company has agreed to pay a $400-million civil penalty. The board releases the results of investigation into its accounting, governance, structure and internal controls.

By Erika Morphy | Updated on May 23, 2006

(To read more on the debt and equity markets, click here and to read more on the multifamily market, click here.)

WASHINGTON, DC-Fannie Mae’s board of directors has released its long awaited Paul, Weiss investigation on the firm’s accounting, governance, structure and internal controls. The board had asked former US Sen. Warren Rudman and the law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP to do this review after a special examination by the Office of Federal Housing Enterprise Oversight in September 2004 raised these issues. In the combined agreements with OFHEO and the SEC, the company has agreed to pay a $400-million civil penalty.

“This important step today builds on some of the changes and progress we have made over the past 18 months to rebuild the company and restore the confidence of our shareholders and stakeholders,” says Stephen B. Ashley, chairman of the board. “The company has undertaken a number of remedial steps. Over the course of the past two years, the board has made a number of changes in its structure and membership, and its relationship to the company.”

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