FBI quizzes companies over sub-prime collapse

The FBI is investigating 14 corporations for possible accounting fraud and other crimes related to the sub-prime lending crisis.

Neil Power, chief of the bureau’s economic crimes unit, would not identify the companies, though he said the cases involved “valuation-type stuff”. The probes included reviews of sub-prime lenders, housing developers and Wall St banks that package loans as securities, he said.

“We’re looking at the accounting fraud that goes through the securitisation of these loans,” Power said. “We’re dealing with the people who securitise them and then the people who hold them, such as the investment banks.”

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