The U.S. Securities and Exchange Commission on Friday charged six former top executives of Fannie Mae and Freddie Mac, including their former chief executives, with securities fraud, alleging they misled investors about the extent of the mortgage giants’ exposure to higher-risk subprime loans.

In two separate lawsuits, the SEC filed charges against three former Fannie Mae executives: former CEO Daniel H. Mudd; former chief risk officer Enrico Dallavecchia; and former executive vice president of Fannie Mae’s single-family mortgage business Thomas A. Lund; and three former Freddie Mac executives: former chairman of the board and CEO Richard F. Syron; former executive vice president and chief business officer Patricia L. Cook; and former executive vice president for the single-family guarantee business Donald J. Bisenius.

Fannie Mae, known officially as the Federal National Mortgage Association, and Freddie Mac, officially the Federal Home Loan Mortgage Corp., both entered into nonprosecution agreements with the commission, each agreeing to accept responsibility for their conduct without admitting or denying liability. Both government-sponsored enterprises also agreed to cooperate with the commission’s actions against the former executives.

"Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was," said Robert Khuzami, director of the SEC’s enforcement division, in a statement.

"These material misstatements occurred during a time of acute investor interest in financial institutions’ exposure to subprime loans, and misled the market about the amount of risk on the company’s books."

The lawsuits, filed in a federal district court in New York City, allege that the six former executives "caused the federal mortgage firms to materially misstate their holdings of subprime mortgage loans in periodic and other filings with the Commission, public statements, investor calls, and media interviews."

The suit against the former Fannie Mae executives also allege they underreported the firm’s exposure to Alt-A loans. The former Fannie Mae executives allegedly committed these actions between December 2006 and August 2008, while the former Freddie Mac executives allegedly committed them between March 2007 and August 2008.

The suits seek financial penalties, surrender of ill-gotten gains with interest, permanent injunctive relief, and to permanently bar the six executives from holding officer or director positions in certain companies.

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