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WASHINGTON (Reuters) - Mortgage finance giant Fannie Mae agreed to pay a $400 million fine after a U.S. probe into its $11 billion accounting scandal blamed management and the board for an "arrogant and unethical" corporate culture that led to massive manipulation of earnings.
A scathing report from Fannie's regulator, the U.S. Office of Federal Housing Enterprise Oversight, found employees massaged earnings to trigger bonuses for senior executives, and that the board of directors contributed by failing to act independently.
The 340-page report laid out a litany of accounting problems and failures by Fannie Mae's (NYSE:FNM - news) management and directors, including current Chief Executive Officer Daniel Mudd.
It also said Fannie used its enormous power in Washington to lobby Congress in an effort to interfere with the federal examination of the company's accounting problems.
But the report did not unveil any new, material accounting errors.
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