Three weeks after the federal government seized control of Freddie Mac and Fannie Mae – the two biggest mortgage companies in the United States – news reports indicate that on September 26, 2008, Fannie Mae and Freddie Mac each received federal grand jury subpoenas from the United States Attorney’s Office for the Southern District of New York.  The subpoenas reportedly relate to the US Attorney’s investigation into accounting, disclosure and corporate governance issues at Fannie Mae and Freddie Mac for the period January 1, 2007 to the present.  Additionally, the mortgage finance companies reportedly each received notice from the Staff of the Enforcement Division of the United States Securities and Exchange Commission indicating that the Enforcement Division is also conducting an inquiry, and directing the Company to preserve documents.

The US Attorney and SEC investigations were disclosed just days after various news outlets reported that the FBI had initiated an investigation into potential fraud at Fannie Mae and Freddie Mac.