The Securities and Exchange Commission (SEC) may pursue civil charges against Daniel Mudd, former CEO of Fannie Mae, over allegations that the mortgage giant failed to tell investors about the extent of its exposure to risky loans.
On March 14, Mudd, who is now CEO of Fortress Investment Group, received a Wells Notice from the SEC. Receipt of a Wells Notice indicates civil charges are likely forthcoming.
Mudd was fired from Fannie Mae in 2008. That same year, the federal government seized control of Fannie Mae and Freddie Mac.
At issue is how Fannie Mae informed investors about the mounting losses it sustained from high-risk mortgage loans and how those loans were valued. The SEC says exposure to the mortgages was drastically understated.