UPDATE 1-Fannie Mae faces class-action suits on accounting

[seemslikeadream]

(Adds professor quotes, background with Freddie Mac)
NEW YORK, Sept 24 (Reuters) - Fannie Mae (FNM.N: Quote, Profile, Research) , under fire from regulators, is facing a groundswell of lawsuits from class-action specialists for billions of dollars in stock losses stemming from the company's faulty accounting.

At least four class-action suits were filed in federal courts as of Friday, naming the No. 1 U.S. home funding company and top executives including chairman and chief executive officer Franklin Raines as plaintiffs.

The suits charged that Fannie Mae misrepresented its financial results by manipulating accounting so the company appeared as a low-risk, steadily growing company to investors.

"The Company issued numerous other false and misleading statements and presented the public with materially false and misleading financial statements that created the illusion that Fannie Mae was a safe and steady earner and largely immune to interest rate fluctuations," said Milberg Weiss Bershad & Shulman LLP in a statement.

Milberg Weiss said it filed its class-action suit on Friday on behalf of Fannie Mae shareholders in the U.S. District Court for the District of Columbia.
more
http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=6329925