Former Fannie Mae chief Mudd facing SEC action

DANIEL Mudd, the former chief executive of government-sponsored mortgage firm Fannie Mae, has received notice from US regulators that he may face claims for allegedly misleading investors about the mortgage company’s exposure to subprime loans.

Mudd, who was ousted from Fannie Mae in 2008 and is now chief executive of hedge fund Fortress Investment Group, confirmed he received a so-called Wells notice on Friday from the US Securities and Exchange Commission (SEC), and said he plans to rebut the allegations.

A Wells Notice is a letter from the SEC that warns people or firms the agency is considering a civil action against them.

Mudd said in a statement that he will file a written response “that will make clear why the SEC staff should not pursue any action in this matter”.

He said the financial disclosures under scrutiny had been “previewed by federal regulators, and have been issued in the same form since the company went into government conservatorship”.

Last month, the SEC filed a similar notification to an existing Freddie Mac executive and at least one former Freddie Mac executive.