-->http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=6547505

WASHINGTON -- U.S. mortgage finance giant Fannie
Mae said on Tuesday the Securities and Exchange
Commission had changed the status of its
investigation of the company's accounting to
formal from informal.

The SEC's move follows a report from Fannie Mae's
regulator, the Office of Federal Housing Enterprise
Oversight, alleging pervasive accounting
irregularities at the company.

The Washington, D.C.-based company, which stands
behind more than $2 trillion in mortgages, said it
will continue to cooperate fully with the SEC.

A formal SEC investigation implies that the SEC has
now assigned staff, budget, and subpoena power to
the ongoing investigation.