Source: Aaron Smith / CNN Money
NEW YORK – The Securities and Exchange Commission charged six former executives of Fannie Mae and Freddie Mac with securities fraud on Friday for misrepresenting their holdings of high-risk mortgage loans.
The SEC is targeting three former executives of Freddie Mac (FMCC,Fortune 500), including chief executive officer Daniel Mudd, chief risk officer Enrico Dallavecchia and executive vice president of single-family mortgage business Thomas Lund.
The agency is also going after three former executives of Fannie Mae (FNMA, Fortune 500): CEO Richard Syron, executive vice president and chief business officer Patricia Cook and executive vice president for the single family guarantee business Donald Bisenius.
The SEC is seeking financial penalties against them, but did not specify an amount.
The suit claims that the executives knowingly approved of misleading statements, downplayed the size of their holdings of subprime loans and falsely claimed that their risky investments were minimal and manageable.
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