Fannie Mae’s federal regulator has suggested that the mortgage giant may have manipulated earnings to justify bigger bonuses to executives, according to news reports.

The regulator, the Office of Federal Housing Enterprise Oversight, presented the results of its long-running review to Fannie Mae’s board of directors Monday night, according to the Washington Post. In the investigation, OFHEO apparently found a pattern of practices aimed at ironing out volatility in profits from quarter to quarter similar to what occurred at rival Freddie Mac.

While OFHEO found a “smoothing” pattern of earnings reporting at Fannie Mae, the review found no evidence of accumulated profits that haven’t been disclosed, as happened at Freddie Mac, the Associated Press reported.

OFHEO’s investigation stems from the accounting scandal at Freddie Mac, which last year revealed the company had understated profits by almost $5 billion for 2000-2002 to smooth earnings and meet Wall Street expectations. Freddie Mac paid a $125 million fine and ousted several top executives.

A spokeswoman for OFHEO said Tuesday that the agency was not commenting on the Fannie Mae review or on when or if it might be released publicly.

Fannie Mae is a shareholder-owned company chartered by Congress to ensure a constant flow of mortgage funds. Fannie Mae’s stock (NYSE: FNM) was trading at $75.18 this morning.

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