Lehman Brothers, AIG, Fannie Mae and Freddie Mac are all now under investigation.
Several US financial firms are under investigation from the Federal Bureau of Investigation (FBI), it has emerged.
The probe represents the latest blow for the American financial system - which has been subjected to volatile markets, forced nationalisations, mergers and the bankruptcy of Lehman Brothers over recent weeks.
Along with the investment bank - whose assets are now being sold off following its declaration of insolvency - insurer AIG and mortgage lenders Fannie Mae and Freddie Mac are all under investigation. The latter three firms have been taken over by the US government, after suffering a loss of investor confidence.
It has been confirmed by a federal law enforcement official that the probe has been launched regarding mortgage fraud, with allegations that executives at the four firms provided "misinformation" to the public. Ongoing FBI investigations into the financial services sector have previously centred on homebuyers being mis-sold high-risk, or sub-prime mortgages by lenders.
The collapse of the sub-prime sector was a key factor behind the onset of the ongoing credit crunch - which resulted in banks becoming less willing to lend to each other and to consumers.
US justice department spokesman Brian Roehrkasse provided few specifics about the investigation, however. "As part of our investigative responsibility, the FBI conducts corporate fraud investigations," he commented.
"The number of cases fluctuates over time, however we do not discuss which companies may or may not be the subject of an investigation."
Comments (5)
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flingcom
24th Sep 2008 18:16
Lehman brother going bust was the least expected... Looks like the american economy is on the slump.
Patricia Nigro
24th Sep 2008 23:13
They definitely need to be investigated. People are losing their homes, the executives at these firms should have to give up their McMansions to help pay for the bailout!
chief wana dubie
25th Sep 2008 03:09
Capitalism, has run amuck!!! It has become Americas and therefore the worlds new religion!!! It has become a sadistic monopoly game, that can only have one winner, and it's not the people!!! This financial collapse, is no accident, it has not only been well planed, it has been documented, read the left behind series, it describes the "churches" plan on turning America into a third world nation, in order to create a one world government!!! America, has fallen victim, to it's Trojan horse---" the universities"!!! They were the ones that taught kings, to be kings, royalty, to be royal!!! What is your degree of nobility??? All of Americas leaders, have the proper degree of nobility, purchased by the universities: business, religious, and political...science, technology, and financial!!! They were all given their missions, toward the same goal, by the same entity: the serpent, biting it's own tail, Babylon the great!!! Bigotry saved me from mortgage failure!
Louise Bristow
25th Sep 2008 03:28
And the Administration wants a BLANK CHECK?
