Freddie Believes It Won't Be Prosecuted

Freddie Mac says it believes that the government's criminal investigation of its accounting scandal is now inactive, issuing a statement that "we expect no further action in this matter."A spokesman for the U.S. attorney in Northern Virginia had no comment on the matter. A Freddie spokesman noted that the government typically does not comment on the status of its investigations. However, at the end of August, the U.S. attorney's office for the District of Columbia confirmed that it had discontinued its criminal investigation of Fannie Mae and will not bring any charges against the company. Freddie's accounting scandal broke into the open in June 2003 when the company fired its two top officers. Eventually, the government-sponsored enterprise restated prior earnings upward by $5 billion. Fannie Mae is facing a downward earnings restatement of $10.6 billion. Neither GSE is current on its earnings statements.