The Attorney General of Ohio has slapped Fannie Mae with a class-action lawsuit, accusing the company of fraudulently manipulating its earnings to increase the price of its stock.

Attorney General Jim Petro filed a securities fraud charge against the company in a U.S. district court on behalf of several groups of Fannie Mae common stock investors including the State Teachers Retirement System of Ohio, the Ohio Public Employees Retirement System and the Ohio Bureau of Workers' Compensation.

The lawsuit claims that Fannie Mae and its top executives purposely inflated the price of its publicly traded common stock to deceive investors about the financial state of the company. The lawsuit also alleges that by releasing a series of false public financial statements the company may have cost shareholders billions of dollars.

Fannie Mae stands accused of violating the Securities Exchange Act and Securities and Exchange Commission rules because they allegedly did not follow standard accounting procedures and are said to have been lacking in internal auditing controls to track their finances. The company is also accused of failing to report the erratic changes in their earnings.

Jim Petro seems to have discovered that money troubles run in Fannie Mae’s family. Last year the Ohio Attorney General filed a similar lawsuit against Fannie’s little brother, Freddie Mac, after discovering suspicious account methods that were used within the company.

Fannie Mae and Freddie Mac are both shareholder-owned, congressionally chartered companies that are meant to consistently provide mortgage funds for U.S. homeowners.

Fannie Mae has yet to comment on the charges.

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