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An outside report on the accounting scandal at Fannie Mae didn’t paint a flattering picture of the legal advice that the mortgage giant received from its lawyers at Wilmer Cutler Pickering Hale and Dorr. The report was written by former Senator Warren Rudman, now a partner at Paul, Weiss, Rifkind, Wharton & Garrison. Rudman and his colleagues concluded that there was no evidence that Wilmer lawyers “knowingly provided false information” to Fannie Mae’s board during the course of a special examination of its books by the mortgage bank’s regulator, the Office of Federal Housing Enterprise Oversight. The report does say, however, that Wilmer’s lawyers should have provided clearer information about the scope of an audit by Ernst & Young. Rudman’s team also found that Fannie Mae and its lawyers had taken an unnecessarily combative approach when it came to interactions with the regulator. “Management and its counsel focused unduly on OFHEO’s motives in conducting the special examination, which led them to dismiss the accounting issues as merely ‘OFHEO’s arguments’ and ‘disagreements,’” the report states. “It turned out, of course, that management and the lawyers were wrong.” Though Wilmer continues to work for Fannie Mae, Latham & Watkins has taken over as lead counsel in the matter (former Latham partner Beth Wilkinson became Fannie Mae’s new GC in December). Wilmer co � managing partner William Perlstein declined comment, citing the continuing investigations.

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