The government is not bringing a criminal case against Fannie Mae for its massive accounting scandal.
The mortgage giant Thursday announced that the United States Attorney’s Office for the District of Columbia is discontinuing its investigation and does not plan to file charges against the company.
“We have informed them that we are declining all charges against the company,” confirmed Channing Phillips, spokesman for US attorney Kenneth Wainstein, according to the Associated Press.
The federal prosecutor launched its probe of Fannie’s accounting policies and practices in October, 2004.
The company announced in May that it agreed to pay $400 million to settle with the Office of Federal Housing Enterprise Oversight (OFHEO) and the Securities and Exchange Commission.
The company also recently announced that it would complete its ongoing restatement by the end of 2006.
Fannie Mae has disclosed $10.8 billion in accounting errors stemming from its derivatives and hedging activities.
“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,” said Daniel H. Mudd, President and Chief Executive officer, in a statement.
The AP also reported that it no individuals are likely to be charged, citing one knowledgeable Justice official. Last June, Rep. Richard Baker (R-La.), chairman of the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, urged Wainstein to investigate former Fannie Mae CEO Franklin Raines and former CFO Timothy Howard for perjury, saying the two men had “failed to testify truthfully in violation of applicable law.”