On Friday, the SEC brought a civil fraud suit against the former CEOs of Fannie Mae and Freddie Mac, as well as four other top executives.  The suit alleges that the executives misled investors with respect to the company’s exposure to subprime mortgages in their loan portfolios.  According to the suit, the executives made material misstatements in order to give investors false confidence.  The SEC has requested that the court disgorge the executives of their unlawful profits and force them to pay penalties.

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