US federal prosecutors and the SEC confirmed last night they have begun separate investigations into mortgage company Freddie Mac.
The announcement came two days after the company cleared out its senior management over accounting irregularities.
New York law firm Weiss & Yourman began a class action lawsuit against Freddie Mac on behalf of investors, saying they bought the company's securities during a time when statements by the company allegedly inflated prices.
Freddie Mac, which owned or had guaranteed $1.27 trillion in home loans at the end of the third quarter 2002, fired president and chief operating officer Mr David Glenn on Monday for failing to fully comply with a review of earnings statements back to 2000.
The company said he altered diaries he provided to an audit committee.
The company has said it expects the restatement to revise earnings higher.
Chairman and chief executive Mr Leland Brendsel and chief financial officer Mr Vaughn Clarke have stepped down.