SEC Gives Fannie Mae and Freddie Mac Immunity from Prosecution

Fannie and Freddie agree to help SEC in civil lawsuit against six former executives, but SEC gives the GSEs immunity from prosecution; probably not a decision that taxpayers will look upon with favor.

Palm Coast, FL – December 16, 2011 – The Securities and Exchange Commission has charged six former executives of Government Sponsored Entities, Fannie Mae and Freddie Mac, with fraud in a civil lawsuit. In return for its cooperation, both Fannie and Freddie were granted immunity from prosecution.
According to the complaint, the executives lied, misleading investors regarding holdings of low quality loans.

Charged were former Fannie Mae CEO Daniel Mudd, former chief risk offricer Enrico Dallavecchia, and former executive vice president Thomas Lund. Freddie Mac executives charged are former Chairman and CEO Richard Syron, former executive vice president and chief business officer Patricia Cook and former executive vice president Donald Bisenius.
This appears to be another in a string of SEC investigations that leave guilty parties out of the fray. The SEC was roundly criticized recently for trying to let Citigroup off the hook with modest fines, no prosecution, and no admission of guilt. Why a Federal Judge Trashed the SEC’s Settlement With Citigroup
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