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SEC may charge former head of Fannie Mae

By Associated Press
March 14, 2011

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NEW YORK — The Securities and Exchange Commission may pursue civil charges against Fannie Mae’s former chief executive, Daniel Mudd, over the mortgage giant’s disclosure of exposure to risky loans.

He got a so-called Wells notice from the SEC, which alerts the target of an investigation that charges may be coming.

“I intend to submit a written response that will make clear why the SEC staff should not pursue any action,’’ Mudd said in a statement.

Mudd was named chief executive in 2004 after the SEC found Fannie Mae had violated accounting rules. He was removed in 2008 when the government took control of Fannie during the mortgage crisis. At issue is how Fannie Mae informed investors. The SEC says exposure to subprime mortgages was understated. Mudd denies this.