Corporations and securities brief ~ OFHEO expands probe into Fannie Mae

[JURIST] Leading Monday's corporations and securities law news, Fannie Mae [official website] regulator the Office of Federal Housing Enterprise Oversight (OFHEO) [official website], has announced it is investigating Fannie's use of trusts which it set up to sell securities. Specifically, OFHEO is determining whether the company accounted for trusts as "qualifying special purpose entities" to keep the trusts' assets and liabilities off the corporate balance sheet. Fannie Mae has been the subject of a massive accounting probe which so far could result in a profit restatement of more than $11 billion. Reuters has more.

In other news...

  • New York Attorney General Eliot Spitzer [official website] released a statement [text] today indicating a civil resolution to his investigation of insurer American International Group Inc. (AIG) is possible. Spitzer said the AIG board is fully cooperating in the investigation. Reuters has more. In related AIG news, new AIG CEO Martin Sullivan, in an attempt to reassure shaky investors, said in a letter [PDF] to shareholders that the company is cooperating fully with regulators. AP has more.

  • The Wall Street Journal is reporting [subscription req'd] Starr International Co., a private company that controls about 12 percent of American International Group Inc.'s [corporate website] shares, has fired seven AIG executives from its board, including new AIG CEO Martin Sullivan and AIG Executive Vice Chairman Donald Kanak. One of Starr's owners is former AIG chairman and chief executive Maurice "Hank" Greenberg which creates a potential conflict of interest as the fired AIG executives continued to rely on Greenberg for a large portion of their pay. Greenberg, however, has offered to sever all of Starr's remaining ties to AIG to avoid these conflicts of interest. Bloomberg has more. The Journal also reported [subscription req'd] the Financial Services Regulatory Authority [official website], Ireland's insurance watchdog, is cooperating with US investigations into a insurance transaction between AIG and General Re Corp. Dow Jones has more.

  • Foamex International [corporate website], maker of foam products, announced the SEC [official website] has started an informal inquiry related to the company's internal controls. Foames, which said it is negotiating a settlement on the matter, will use the 45-day extension granted by the SEC to file assessments of internal controls as required by the Sarbanes-Oxley Act [PDF]. Read the Foamex press release. The Philadelphia Business Journal has more.

  • Thailand's SEC [official website] announced Thai Military Bank PCL's [corporate website] securities sales operations will be put on probation for one year starting April 1 over an improper distribution of Thai Oil PCL's IPO last October. The bank failed to comply with the share allocation method indicated in the Thai Oil prospectus. Dow Jones has more.

  • ChevronTexaco Corp. [corporate website] announced it will buy rival Unocal Corp. [corporate website] for about $16.4 billion. The move, which gives ChevronTexaco the number five global oil company by market capitalization, expands the company's drilling reach in undeveloped areas in Asia and strengthens its position in the Gulf of Mexico. Read the ChevronTexaco press release. Reuters has more.

  • Krispy Kreme Doughnuts Inc. [corporate website] announced it has a new financing deal worth $225 million in credit in place. The lenders include Silver Point Finance LLC, Wells Fargo Foothill Inc. [corporate website], and Credit Suisse First Boston [corporate website]. Read the Krispy Kreme press release. AP has more.

  • The US District Court for the Eastern District of New York [official website] has dismissed all claims brought by Paycom Billing Services, Inc. [corporate website] against MasterCard International [corporate website] over potential antitrust claims as a result of MasterCard's rules or policies. Business Wire has more.
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