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The Securities and Exchange Commission on Friday brought civil fraud charges against six former top executives at Fannie Mae and Freddie Mac, saying they misled investors about risky subprime loans the mortgage giants held when the housing bubble burst.
Those charged include the agencies’ two former CEOs, Fannie’s Daniel Mudd and Freddie’s Richard Syron. They are the highest-profile individuals to be charged in connection with the 2008 financial crisis.
Mr. Mudd, 53, and Mr. Syron, 68, led the mortgage giants in 2007, when home prices began to collapse. The four other top executives also worked for the companies during that time.
“Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was,” said Robert Khuzami, SEC’s enforcement director. “These material misstatements occurred during a time of acute investor interest in financial institutions’ exposure to subprime loans, and misled the market about the amount of risk.”
BP settles with maker of failed blowout preventer
NEW ORLEANS — Cameron International, maker of the Deepwater Horizon blowout preventer that failed to stop last year’s massive oil spill in the Gulf of Mexico, has agreed to pay $250 million to BP under a legal settlement, BP said Friday.
BP said it was “in their mutual best interests, and the agreement is not an admission of liability by either party.” The companies are dropping all claims against one another, they said.
The settlement comes in advance of a federal trial over the catastrophic Gulf oil spill. The non-jury trial is slated to begin in February and determine fault in the April 20, 2010, explosion and subsequent oil spill off the Louisiana coast of more than 200 million gallons of oil.
Oil and gas analysts said they saw Friday’s settlement as setting the stage for more out-of-court agreements. At this point, Halliburton Corp., which supplied the cement to seal the blown-out well, and Transocean Ltd., the drilling company, have not settled with BP.
The federal government, individual Gulf states and many other plaintiffs also have not settled.
From wire dispatches and staff reports
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