Lehman, AIG face FBI probe

25 September 2008

Four US financial firms affected by the recent market volatility are to be investigated for mortgage fraud by the FBI.

Lehman Brothers, which declared itself bankrupt earlier this month, is to be one of the companies under the spotlight.

Joining it are insurer AIG and mortgage lenders Fannie Mae and Freddie Mac - all three of which were taken over by the government after investor confidence in them fell dangerously low.

It is thought that the investigation will centre on whether or not executives at these firms mis-sold sub-prime mortgages to the general public.

The sub-prime sector's meltdown last summer was a primary factor behind the onset of the credit crunch - which has largely frozen much inter-bank lending since.

US justice department spokesman Brian Roehrkasse commented: "As part of our investigative responsibility, the FBI conducts corporate fraud investigations.

"The number of cases fluctuates over time, however we do not discuss which companies may or may not be the subject of an investigation."

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development