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WASHINGTON, DC-Fannie Mae says it's been advised by the US Attorney's Office for the District of Columbia that it is discontinuing its investigation into its accounting policies and practices and does not plan to file charges. Fannie Mae was initially notified in October 2004 of the US Attorney's investigation of the company.
With this step it appears as though the fallout from Fannie Mae's accounting irregularities are coming to an end--although there are some members of Congress calling for new laws to further reform the GSAs. Fannie Mae has reached settlements with the Securities and Exchange Commission and the Office of Federal Housing Enterprise Oversight, which included a $400-million fine.
Also, in its latest 12b-25 filing, the company stated that it would complete its ongoing restatement by the end of 2006. Fannie Mae has not filed an earnings statement since late 2004, when it began re-auditing its financials. As it did, it became apparent that Fannie Mae's accounting was not consistent with generally accepted accounting principals.
There have been a number of departures from the company's highest echelons of management as a result, including former CFO Timothy Howard, former Controller Leanne Spencer and former chairman and CEO Franklin Raines.
The new management has promised to continue the agency's reform initiatives. "We will continue to work closely and cooperatively with our regulators as we move forward to carry out the terms of our agreements, complete our restatement and build a better company," Daniel H. Mudd, Fannie Mae president and CEO, says in a statement.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
