FBI probes finance giants for fraud: report

WASHINGTON, September 24, 2008 (AFP) – The US Federal Bureau of Investigation is probing allegations of fraud by 26 Wall Street firms including several investment giants whose collapse sent world markets into turmoil, US media said Tuesday.

The FBI has set its sights on investment titan Lehman Brothers, mortgage giants Fannie Mae and Freddie Mac and insurer AIG, in a wide-reaching inquiry that comes as lawmakers rush to agree a 700-billion-dollar government bailout of the troubled US financial sector.

The FBI probe aims to determine whether company executives had any responsibility for the institutions’ financial woes through “misinformation or material misinformation,” CNN said.

FBI Director Robert Mueller said last week that the bureau was probing 24 financial institutions, but gave no details other than to describe them as “large corporations” that may face allegations of misstated assets.

ABC News said the probe was “multifaceted and the net is much deeper than the major firms officials confirmed today,” adding that the probe had expanded from 14 major firms to 26 in less than a year.

“The FBI currently has 26 pending corporate fraud investigations involving subprime lenders,” FBI spokesman Richard Kolko told ABC