Government sues former Fannie Mae executives

Federal regulators have filed a complaint against former Fannie Mae executives, seeking more than $100 million in fines. Read the Washington Post’s story here, and read more below the fold. The government claims that the former executives manipulated Fannie Mae’s earnings in order to increase the level of their compensation. The executives counter by arguing, among other things, that Fannie Mae’s earnings were certified by the company’s outside directors and its auditors. It may well be that these three men have a strong, viable defense. This particular argument, though – the board and the auditors said all was well – hasn’t worked very well for some other high profile buisness defendants. Specifically, Jeff Skilling, the former Enron CEO, is now doing time in a federal corrrectional institutition. And Richard Grasso, the former NYSE chief, has not fared especially well in his tussle with the New York Attorney General.