FBI fraud probe into banking crisis firms

The FBI is launching an investigation into four major US financial institutions involved in the recent banking crisis, according to reports from the US media.

It is believed that investigators will be examining the possibility of fraud by mortgage giants Fannie Mae and Freddie Mac, failed investment bank Lehman Brothers, and insurer AIG.

The reports suggest that top managers at the firms will also be investigated.

The FBI began a general inquiry across the financial sector last year when the US housing market began to slump, prompted by concerns over the way in which high-risk sub-prime mortgages were being sold.

Lenders that sold home loans to those on low or unpredictable incomes have faced inquiries, along with investment banks that then packaged these loans and sold them on.

Officials told the Associated Press news agency that investigations into the four companies were at an early stage.

ABC News said the probes were trying to establish how far company officials had deliberately misled investors about the financial strength of their institutions.

FBI director Robert Mueller announced last week that more than 20 large financial firms were already under investigation.