Home mortgage giant Fannie Mae said that it won't face criminal charges over the company's massive accounting irregularities.

In a statement, the company said that it was told by prosecutors in the U.S. attorney's office that they were dropping their investigation after two years.

In May, Fannie Mae settled with the Securities and Exchange Commission and the Office of Federal Housing Enterprise Oversight, paying a $400 million civil settlement over its accounting problems and what regulators called earnings manipulation.


The SEC still could bring civil actions against individual executives, many of whom pocketed million in bonuses from 1998 to 2004 for hitting earnings targets. OFHEO might also pursue civil or administrative actions against former executives.Earlier this month, Fannie Mae said that it believes its internal accounting review is finally over, and that its anticipated restatement will be much less than its previous $2.4 billion estimates. The company also said that it expects to be able to complete the restatement of its 2004 earnings by the end of this year. The company hasn't submitted a filing since late 2004 after its independent auditor, KPMG, refused to sign off on its earnings report.

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