Fannie, Freddie Probe Focuses on Disclosure

The investigation by the Securities and Exchange Commission into Fannie Mae and Freddie Mac is homing in on the extent to which the mortgage-finance giants adequately disclosed their exposure to subprime loans, the Wall Street Journal reported today. The agency on Friday sent Daniel Mudd, the former chief executive of Fannie Mae, a Wells notice, which indicates that the SEC staff is preparing to recommend civil enforcement actions and gives individuals the opportunity to persuade regulators against such an action. The SEC is weighing whether to include charges against Fannie Mae and Freddie Mac - in addition to individuals - in any enforcement action.


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