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24 September 2008

Corruption: It's the American Way

Corruption: It's the American Way:
The FBI has begun an investigation into four major US financial institutions caught up in the current financial crisis, US media say.

Investigators are reportedly examining possible fraud by mortgage giants Fannie Mae and Freddie Mac, the failed bank Lehman Brothers and insurer AIG.

Top managers at those firms are also being investigated, the reports say.

In the last year, as the US housing market slumped, the FBI began a broad inquiry across the financial sector.

It was prompted by concerns over the way high risk, "sub-prime" mortgages were being sold.

It has been looking at mortgage lenders who sold home loans to buyers on low or unpredictable incomes, and also the investment banks that packaged these loans and sold them on.

The slump in the US housing market has resulted in billions of dollars of losses for these banks and turmoil in world credit markets.

Freddie Mac, Fannie Mae and AIG are all being bailed out by the US government following bankruptcy fears.

Lehman Brothers, a top investment bank, has filed for bankruptcy protection.

The FBI investigation into these four companies is at a preliminary stage, the reports say.

Last week FBI Director Robert Mueller said more than 20 large financial firms were already under investigation.

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