Fannie Won't Face Charges

Updated from 9:27 a.m. EDT

The government won't charge Fannie Mae (FNM Quote - Cramer on FNM - Stock Picks) over the accounting shenanigans that led to the departure of previous management at the big mortgage company.

Washington-based Fannie said Thursday morning that the U.S. attorney for the District of Columbia is ending its investigation and doesn't plan to file charges in the case. Fannie is restating its books going back several years to fix some $11 billion in accounting errors.

Fannie was recently trading up $2.40, or 4.9%, at $51.57.

Fannie's former CEO Franklin Raines and former finance chief Tim Howard stepped down at the end of 2004 after the Securities and Exchange Commission's chief accountant ruled that the company's books were cooked. Up to that point Raines had waged a war of words with Fannie's main regulator, the Office of Federal Housing Enterprise Oversight, claiming the company's bookkeeping was proper despite mounting evidence to the contrary.

The company agreed in May to comprehensive settlements resolving matters with OFHEO and the SEC. Fannie paid $400 million to settle those probes, which ended with regulators blasting the mortgage finance firm for fostering an "arrogant and unethical corporate culture."

Fannie has said it aims to complete its ongoing restatement by the end of 2006.