US prosecutors have opened a criminal investigation into accounting errors at US mortgage financing company Freddie Mac, the Washington Post said today.
Specifics of the criminal probe were unknown, although one of the government officials said prosecutors were looking at possible violations of federal securities law, it said.
On Monday, Freddie Mac said it had fired president and chief operating officer Mr David Glenn for failing to co-operate fully with auditors, and replaced both the chief executive and the chief financial officer.
The shake-up came after the group announced earlier this year it would have to restate accounts for 2000, 2001 and 2002.
Corrected figures, to be released with a slight delay but still before October, are likely to increase past earnings, with "offsetting effects in future periods," it said.
A stockholder-owned corporation chartered by Congress in 1970 to help pump liquidity into the housing market, Freddie Mac's mortgage portfolio amounted to $1.311 trillion at the end of 2002.
The Office of Federal Housing Enterprise Oversight, which oversees Freddie Mac, said it had tasked a special investigative team to review accounting practices related to the restatement. AFP