Industry News

Fannie Mae sues auditor KPMG

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Fannie Mae has sued its former outside auditor, KPMG LLP, alleging the firm's "professional negligence" forced the government-sponsored mortgage repurchaser to undertake one of the largest accounting restatements in history. In a complaint filed Tuesday in the Superior Court of the District of Columbia, Fannie Mae said that for more than 30 years it relied on KPMG to review and analyze its critical accounting policies and practices, and to act as "an independent watchdog." KPMG was paid "tens of millions of dollars to do so," the complaint said. A scandal over Fannie Mae's accounting and management policies has caused more than $2 billion in damages, including more than $1 billion in costs to correct financial statements "negligently approved" by KPMG, the complaint alleges. The suit, which alleges malpractice, breach of contract and negligence, seeks to recover those damages, legal costs, plus "any further relief the court may deem just and proper in light of all the circumstanc...