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FBI Probes Firms at Center of Financial Crisis

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By Admin on September 24, 2008 9:47 AM

A number of firms at the center of the current financial crisis and Wall Street bailout debate are being investigated by the Federal Bureau of Investigation (FBI), for possible securities violations related to subprime lending.

AIG, Fannie Mae, Freddie Mac, and Lehman Brothers -- and their executives -- are among 26 sub-prime lenders being investigated by the FBI, according to CNNMoney.com. In recent years, subprime loans allowed people with lower income or poor credit to purchase homes. But as the housing bubble burst and these loans became unaffordable for many borrowers, foreclosures saw a huge increase nationwide, a major trigger for the current financial crisis. According to Bloomberg.com, the FBI's investigation centers on whether the financial giants committed accounting misstatements and securities violations that may have played a role in the subprime collapse.