Washington – Embattled mortgage giant Fannie Mae is expected to be fined several hundred million dollars over the alleged manipulation of accounting so that executives could collect millions in bonuses, in a settlement to be announced today.
The deal with the Office of Federal Housing Enterprise Oversight and the Securities and Exchange Commission comes as the government-sponsored company struggles to emerge from an $11 billion accounting scandal. The housing oversight agency is scheduled today to issue the results of its extensive investigation of Fannie Mae, an assessment that is widely expected to be sharply critical and to touch on areas not addressed in a previous report ordered by the company’s board of directors.
Those areas include the role of Fannie Mae’s board and some executives still at the company in the accounting debacle, according to two individuals familiar with the report, who spoke Monday on condition of anonymity. The regulators are expected to recommend that the company review the executives’ actions with an eye to possibly firing or disciplining them, they said.
One of the individuals confirmed the anticipated fine against Washington-based Fannie Mae, which was first reported Monday evening by The Wall Street Journal Online.
According to regulators, Fannie Mae in 1998 improperly put off accounting for $200 million in expenses to future periods so executives could collect $27 million in bonuses.
