Following a review of Fannie Mae's accounting practices, the Securities and Exchange Commission said that the mortgage concern didn't comply with two major accounting rules and asked it to restate past earnings.

"Our review indicates that during the period under our review, from 2001 to mid-2004, Fannie Mae's accounting practices did not comply in material respects with the accounting requirements in Statement Nos. 91 and 133," a statement issued late Wednesday by SEC chief accountant Donald Nicolaisen said. The rules relate to accounting for deferred purchase price adjustments and for derivatives and hedging activities.

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