Players Line Up Legal Counsel in Fannie Mae Case

As the Justice Department commences a criminal probe into accounting practices at mortgage lender Fannie Mae, the parties involved are retaining some of Washington's top attorneys.

Fannie Mae confirmed the Justice Department's investigation in a Securities and Exchange Commission filing, just days after executives testified before Congress that no wrongdoing had occurred, Dow Jones Newswires reported.

The U.S. Attorney's Office for the District of Columbia told Fannie on Friday not to destroy key documents "relating to matters discussed in the (Office of Federal Housing Enterprise Oversight) report," Dow Jones reported, referring to the scathing OFHEO 211-page review of the company's accounting practices, accusing executives of manipulating earnings to hit analysts' targets to maximize their annual bonuses in at least one instance.

The lawyers are lining up to do battle in cases involving shareholder lawsuits against Fannie, OFHEO charges and the Justice and SEC investigations. Fannie has hired two of Enron's top defense firms to deal with the current crisis-Wilmer Cutler Pickering and Skadden, Arps, Slate, Meagher & Flom-and has several other top firms on regular retainer. Company spokespeople declined to name them all, Dow Jones reported.

Fannie has also retained high-profile white collar criminal defense attorney Robert Bennett at Skadden Arps, who led the firm's work in defending Enron Corp. and HealthSouth Corp. Bennett is probably most famous for his work defending former President Bill Clinton against sexual harassment charges levied by Paula Jones, Dow Jones reported.

Franklin Raines, Fannie's chief executive, has engaged Robert Barnett of Williams & Connolly to represent him personally, Dow Jones reported, adding that Barnett counts among his clients Bill and Hillary Clinton, Madeleine Albright, Queen Noor of Jordan and James Baker, to name a few.

Fannie's board of directors has also retained counsel, former Senator Warren B. Rudman, Republican of New Hampshire, who is now a partner in Paul, Weiss, Rifkind, Wharton & Garrison, to lead an independent investigation into OFHEO's allegations, Dow Jones reported.

You may like these other stories...

The US Securities and Exchange Commission (SEC) has chosen a former partner and vice chairman with Deloitte LLP as its new chief accountant.James Schnurr, who specialized in financial and SEC reporting for public companies...
Summer is a time for kicking back and playing a few round of golf with friends, for example. But if you're on the green, you'd better be careful: The SEC may be looking over your shoulder.In July, the SEC announced...
An examination initiative launched by the US Securities and Exchange Commission (SEC) earlier this week will enable the agency to evaluate whether municipal advisors are complying with new SEC rules that went into effect...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.