US Charges ex-Fannie, Freddie CEOs with Fraud

"The executives were accused of understating the level of high-risk subprime mortgages that Fannie and Freddie held just before the housing bubble burst. '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. Khuzami noted that huge losses on their subprime loans eventually pushed the two companies to the brink of failure and forced the government to take them over."