Investors harmed by financial shenanigans at mortgage lender Fannie Mae will collectively receive a whopping payout of $356 million, thanks to the Securities and Exchange Commission.
The SEC said it would begin sending out checks to individual investors, pension funds and other victims who invested in the Federal National Mortgage Association between 1998 and 2004. The money will come from the Fair Fund, which the SEC set up in the wake of the Sarbanes-Oxley Act to distribute settlement money to harmed investors instead of to the U.S. Treasury.
Fannie Mae was accused of using improper accounting methods, including the deferral of $200 million worth of estimated expenses in 1998 to allow management to receive their full annual bonuses. The SEC also charged Fannie Mae with misapplying generally accepted accounting principles and financial accounting standards for loan fees, premiums and discounts, as well as improper hedge accounting, to avoid the appearance of income statement volatility and disruptions in earnings growth.
The organization needed to restate its financials for 2001, 2002, 2003 and the first two quarters of 2004 to the tune of $6.3 billion.
