2008 Crisis: Former top Fannie, Freddie official sued

They were sued by US regulators on charges of misleading investors.

NEW YORK: Six former top executives at Fannie Mae and Freddie Mac were sued by US regulators on charges of misleading investors about the mortgage finance companies’ exposure to risky home loans in the run-up to the 2008 financial crisis. The case is one of the US Securities and Exchange Commission’s biggest actions against high-level financial industry executives, although the regulator did not specify a dollar amount for damages in the alleged fraud. Many lawmakers consider Fannie Mae and Freddie Mac at least partly responsible for the 2008 crisis, saying they encouraged lax lending to home buyers that led to a massive real estate bubble. The SEC brought civil fraud charges on Friday against former Fannie Mae CEO Daniel Mudd, former Freddie Mac CEO Richard Syron and four other one-time executives. Mudd, now chief executive of Fortress Investment Group, and Syron left the mortgage finance companies after they were taken over by the government in 2008 as mortgage losses spiraled. The two firms have been propped up by $169 billion in federal aid since they were seized.

Published in The Express Tribune, December 18^th, 2011.