MercoPress. South Atlantic News Agency

FBI probes into four US giant financial institutions

The US Department of Justice, FBI is investigating four of the US financial giants caught out by the financial crisis hitting Wall Street for possible fraud, according to reports.

FBI is said to be investigating Fannie Mae, Freddie Mac, Lehman Brothers and AIG, as well as their executives. The move, according to CNN which reported the story, comes as part of the FBI's broader investigation into mortgage fraud. In June it was revealed that the US authorities had already arrested and charged more than 400 real estate brokers with undertaking fraudulent activities. At the time, one FBI official warned that the arrests were simply a 'good start', while another said the bureau was keen to show it was 'serious about these frauds and that we understand that if we don't take action against them it will create further problems for our economic future.' An FBI spokesman confirmed to CNN that 26 large financial firms were currently under investigation as part of the bureau's mortgage fraud inquiry. The FBI investigation is centered on lenders who sold home loans to buyers on low or unpredictable incomes and also the investment banks that packaged these loans and sold them on. ABC News, citing unidentified sources, said the probes were assessing whether company officials systematically misled investors about the financial strength of their institutions. The slump in the US housing market has resulted in billions of dollars of losses for these banks and turmoil in world credit markets. Freddie Mac, Fannie Mae and AIG are all being bailed out by the US government.