According to Senator Scott Brown (R-Massachusetts), the Securities and Exchange Commission (SEC)’s civil suit against six former executives of Fannie Mae and Freddie Mac simply doesn’t cut it. Saying that the SEC has failed to “achieve justice and accountability for the American people” and that there needs to be a closer inspection of the GSE’s business dealings prior to and during the housing collapse, Brown is publicly pressing the Department of Justice (DOJ) and the SEC to pursue criminal charges against the GSEs. Fannie Mae and Freddie Mac have both entered non-prosecution agreements with the SEC, something Brown calls a “troubling pattern” in the way that the DOJ and the SEC have dealt with the now-federal entities.
Brown and other critics of the SEC’s and the DOJ’s handling of Fannie and Freddie have been loudly vocal about the fact that “the taxpayer is currently on the hook for at least a $150 billion loss…which will likely continue to grow and which likely will never be repaid”. The six former executives being sued by the SEC have been accused of misleading investors about the degree of subprime exposure in GSE portfolios. Some have settled while others deny the claims.
Do you think that Brown is right and the SEC and DOJ are being too soft on the GSEs?
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