Related subpoenaed in Fannie investigation

From left: FHFA Inspector General Steve Linick and Related Companies Chairman Stephen Ross

The Related Companies has been served with a subpoena as part of a federal inspector general’s investigation of a transaction the company did with Fannie Mae that allowed Related to invest a stake in several apartment buildings that had been foreclosed upon by Fannie, according to the Wall Street Journal. Related retained Kenneth Breen, a New York-based litigator at international law firm Paul Hastings, in the case.

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As previously reported, the inspector general began a limited investigation into Fannie Mae in October; the agency responded by putting employees on leave until the investigation is completed.

“The investigation is limited in scope and we are cooperating fully,” a Fannie spokesperson commented.

One of the most senior executives being looked at by investigators is David Worley, a Fannie senior vice president, chief risk officer for the multi-family business unit. [WSJ]