daniel mudd and freddie mac c.e.o. richard syron the collapse of fannie mae and freddie mac is projected to cost taxpayers $124 billion. are fighting the charges, which syron's attorney calls quote, "fatally flawed." >> reporter: s.e.c. lawyers say, around the time the housing bubble peaked, fannie mae and freddie mac executives used misleading definitions of subprime loans to hide the truth from investors. >> as they were driving up their market share, fannie mae, freddie mac and the executives sought to maintain the illusion that the business involved minimal and manageable credit risk. >> reporter: the sec says former fannie mae c.e.o. daniel mudd and former freddie mac c.e.o. richard syron and four other top executives committed securities fraud, hiding risks that eventually brought down the mortgage giants. the case sites freddie mac's june 2008 disclosure showing the company held $6 billion in subprime loans. the s.e.c. claims the figure should have been $244 billion. fannie mae told investors as late as june 200

of fannie mae, daniel mudd, and the former chairman and c.e.o. of freddie mac, richard syron. > woodruff: together, mudd and syron-- seen here at a congressional hearing in 2008-- are the highest-profile individuals to be accused in the financial crisis. the other four executives named fannie and freddie own or guarantee about half of all u.s. home mortgages. but the housing meltdown brought them to the brink of collapse, and the government seized control of both in september of 2008. since then, the federal government has lent the firms more than $150 billion, the largest bailout of the financial crisis. mudd was fired from fannie after the federal takeover, and today, he insisted the lawsuit should never have been brought. he said: "every piece of material data about loans held by fannie mae was known to the united states government and to the investing public. the s.e.c. is wrong." fannie and freddie entered agreements with the government today accepting responsibility for their conduct without admitting or denying the allegations. federal cri

of freddie mac and daniel mudd former chief of fannie mae committed fraud, misleading investors on the risks they were taking in subprime mortgages and down playing the hundreds of billions put at risk, all of it backed by taxpayer guarantees. robert khuzami is the chief of enforcements at the s.e.c.. >> fanny, freddie and their executives sought to maintain the illusion that the business involved minimal and manageable credit risk. >> reporter: for example, in 2007 with fanny aggressively buying subprime loans and with congress concerned about taxpayer losses, the s.e.c. says mudd gave the house a low ball figure he knew was fault. >> as a result, our exposure was minimal, less than 2.5% of our book. >> reporter: s.e.c. documents say fannie's exposure was higher by tens of billions and closer to 5%. one year later in 2008 the s.e.c. says the hidden risk was enormous, that freddie held almost $250 billion in subprime but disclosed six billion. fannie held around $110 billion in subprime but disclosed eight. both former c.e.o.s said in statements they never misled congress or investors.

says daniel mudd and richard syron tried to cover up the extent of the subprime mortgages that they were involved in. fannie and freddie collapsed in 2008 leaving the taxpayers with a $150 million bill. >>> five virginia college students accused in a hazing death will avoid jail time. samuel harris mason was found dead in october of last year. investigators say he was forced to drink while pledging a fraternity. five members of the fraternity pleaded guilty to providing alcohol to a minor and will pay a $1,000 fine. >>> the barefoot bandit will spend more than seven years in prison. colton harris moore pleaded guilty today in a courtroom in washington state. he evaded the police for two years stealing boats, cars and airplanes to get away. in many cases all that was left behind were his footprints. >>> stead ahead joy full reunions, soldiers from iraq return to the washington area. >>> police arrested a man in virginia after he was peering on women from above. >>> a block buster divorce in [ female announcer ] at verizonfios.com, you can choose your channel package. ♪ you can choose your

. >> reporter: but today both former ceos, daniel mudd of fannie mae and richard syron of freddie mac were accused of civil fraud. the securities and exchange commission, or e.s.c., alleged that they and four other executives made false and misleading statements to conceal the extent of risky sub prime mortgages. >> today's action is about holding individuals accountable for their role in misleading the public. >> reporter: who got hurt here? a lot of hard-working americans saving for retirement. >> fannie and freddie were two of the most common companies that the average guy on the street invested their retirement income in, and their retirement accounts took a real hit. >> reporter: when the companies imploded, taxpayers had to bail them out, to the tune of $150 billion. these are the highest profile individuals facing legal action in conjunction with the meltdown, but it's not likely to satisfy outrage that no big players on wall street have been criminally prosecuted. >> none of them is even under indictment. indeed, there does not appear to be a serious investigation of any of th

daniel mudd is taking a leave of absence from the top spot at fortress investments. the securities and exchange commission sued mudd friday for allegedly misleading investors about the risk of the subprime loans in its mortgage portfolio. fortress says the firm's co- founder, randal nardone, will take over. >> tom: companies continue buying back more and more of their own stock. for the ninth straight quarter, companies in the s&p 500 spent more money on stock buybacks-- almost $120 billion between july and september. spending the most on buybacks during the third quarter? exxon mobil, with $5.5 billion of its own shares. stock buybacks generally are seen as a good thing for shareholders. with less shares on the market, that means more earnings money to go around. >> suzanne: with the year coming to an end, tonight's "money file" has some tips on getting your financial house in order. here's gabe albarian, author of "financial swagger." >> the most important lesson in financial education is to maintain a healthy credit history, which is a significant factor when fina

daniel mudd is taking a leave of absence from the top spot at fortress investments. the securities and exchange commission sued mudd friday for allegedly misleading investors about the risk of the subprime loans in its mortgage portfolio. fortress says the firm's co- founder, randal nardone, will take over. >> tom: companies continue buying back more and more of their own stock. for the ninth straight quarter, companies in the s&p 500 spent more money on stock buybacks-- almost $120 billion between july and september. spending the most on buybacks during the third quarter? exxon mobil, with $5.5 billion of its own shares. stock buybacks generally are seen as a good thing for shareholders. with less shares on the market, that means more earnings money to go around. >> suzanne: with the year coming to an end, tonight's "money file" has some tips on getting your financial house in order. here's gabe albarian, author of "financial swagger." >> the most important lesson in financial education is to maintain a healthy credit history, which is a significant factor when fina

daniel mudd is taking a leave of absence from the top spot at fortress investments. the securities and exchange commission sued mudd friday for allegedly misleading investors about the risk of the subprime loans in its mortgage portfolio. fortress says the firm's co- founder, randal nardone, will take over. >> tom: companies continue buying back more and more of their own stock. for the ninth straight quarter, companies in the s&p 500 spent more money on stock buybacks-- almost $120 billion between july and september. spending the most on buybacks during the third quarter? exxon mobil, with $5.5 billion of its own shares. stock buybacks generally are seen as a good thing for shareholders. with less shares on the market, that means more earnings money to go around. >> suzanne: with the year coming to an end, tonight's "money file" has some tips on getting your financial house in order. here's gabe albarian, author of "financial swagger." >> the most important lesson in financial education is to maintain a healthy credit history, which is a significant factor when fina

. >> reporter: in just one year, daniel mudd earned nearly $11 million as ceo of fannie and richard syron more than $18 million as ceo of freddie. they put out statements today. the six could face millions in fines but they do not face jail time. only the justice department can bring criminal charges. >> what we're getting is some money sloshing around, but not that real sense of justice and certainly not the acknowledgement that we feel as a country, we deserve to receive, to hold individuals accountable for what they did. >> reporter: and fannie and freddie themselves are always off the hook. the s.e.c. agreed today it will not sue the mortgage giant. as for those criminal charges, the justice department says it is still investigating fannie m. diane? >> all right, abc's cecilia vega reporting in tonight. >>> and now, we turn to that bombshell testimony in the penn state sexual abuse case. for the first time, the star witness, the cornerstone of the prosecution, spoke out about what he says he actually saw in that locker room, and what he did next. here's abc's jim avila. >> reporter: h

now, these suits claim that daniel mudd, the former fannie mae ceo, and richard siren understated theunt of subprime securities they were exposed to by hundreds of billions of dollars. ken rosen of uc berkeley told "outfront" today that, "it's long overdue attempt to hold accountable some of those responsible for the massive losses in the mortgage market meltdown." now, fannie and freddie are ground zero for the housing crisis in this country. companies were created to provide stability in the housing market, no increase home ownership in this country. and in the process, they became massive government-sponsored enterprises. they make too big to fail look tiny. combined, they hold or guarantee $5 trillion of u.s. home mortgages. that's half the total u.s. mortgage market, and since this whole crisis began, they have been buying nine and ten mortgages in this country. it is why the government had to bail them out, at a total estimated cost of $125 billion through 2014. but do we really need fannie and freddie? canada does not have a home mortgage interest deduction or a fannie or a fre

now, these suits claim that daniel mudd, the former fannie mae ceo, and richard siren understated thet of subprime securities they were exposed to by hundreds of billions of dollars. ken rosen of uc berkeley told "outfront" today that, "it's long overdue attempt to hold accountable some of those responsible for the massive losses in the mortgage market meltdown." now, fannie and freddie are ground zero for the housing crisis in this country. companies were created to provide stability in the housing market, no increase home ownership in this country. and in the process, they became massive government-sponsored enterprises. they make too big to fail look tiny. combined, they hold or guarantee $5 trillion of u.s. home mortgages. that's half the total u.s. mortgage market, and since this whole crisis began, they have been buying nine and ten mortgages in this country. it is why the government had to bail them out, at a total estimated cost of $125 billion through 2014. but do we really need fannie and freddie? canada does not have a home mortgage interest deduction or a fannie or a fredd

daniel mudd and richard syron are the two highest ranking officials yet to be charged for their involvement- mudd is the former c.e.o. of fannie mae and syron of freddie mac and the two are alleged to down play their exposure to the risky subprime mortgage loans. america's most inspirational figures cat up in a big scam. former notre dame player has settle add lawsuit with the s.e.c. after being charged with securities fraud. he is accused of swindling investors in an energy drink he wanted to promote against gatorade and not admitting get he will pay $400,000. >> that is probably what you had this morning. i am not sure if it is working. rick: ali and i had gatorade. take note. another nice day and week across the east coast, the 7th in a row where no real rain across the east. nice. cooler, again, and santa ana winds in southern california and the fire sleet with us again today and better tomorrow, but the next storm is moving across the southwest. tell me about the weather in your place on twitter. temperatures are cooler in the north but no one is dealing with a cold out break at all wh

. >> reporter: but on friday, both former ceos, daniel mudd and richard siren of freddie mac were accused of civil fraud. the securities and exchange commission, or s.e.c., alleged that they and four other executives made false and misleading statements to conceal the extent of risky subprime mortgages. >> today's action is about holding individuals accountable for their role in misleading the public. >> who got hurt here? >> a lot of hard working americans saving for requirements. >> fannie and freddie were two of the most common companies that the average guy on the street invested their retirement in. their retirement accounts took a real hit. >> when the companies imploded, taxpayers had to bail them out. these are the highest profile individuals facing charges in the biggest meltdown. no one on wall street has even been looked at. >> the former ceos emphatically deny any wrongdoing and say the allegations are without merit. they insist they fully disclosed all risks to investors. mudd says he looks forward to his day in court where the standard is not politics. >>> the millionaire de

it includes daniel mudd and current chief executive of fortress investment group, and richard syron,ccused yesterday of understating fannie and freddie holdings of high- risk home loans. you can read more about that in this morning's." financial times" weekend edition. caller: i just want to say, some of the people that call and, i sit here and listen to, today what is going on is that we have people who know nothing about politics really wanting to say something politics. something about politics all of a sudden because obama is empowered or president or whatever, just like the ridiculously talking a minute ago, absolutely nothing, they don't know nothing about politics. i think people should stay out of the that they don't know anything about politics. or about these -- yes, i think we have the greatest president there is so far. the last eight years, this president is the best that we have. the reason -- what is is what it is. we have republicans that had been nasty about such questions that they do not need to be so bad, but the thing is, we need to address this situation today.