FNM TUMBLES $4 Billion market value wiped out!

WASHINGTON, Sept 28 (Reuters) - Shares in Fannie Mae plunged on Wednesday after a report saying regulators found new accounting violations at the mortgage finance enterprise, which is already under scrutiny for bookkeeping distortions.
A spokeswoman for the Office of Federal Housing Enterprise Oversight, which oversees Fannie Mae's financial soundness, would not confirm or deny on Wednesday a Dow Jones report that the regulator has found extensive additional problems.
"We have an ongoing examination and I have no comment," said Corinne Russell, a spokeswoman for the Office of Federal Housing Enterprise Oversight.
Fannie Mae (FNM.N: Quote, Profile, Research) shares tumbled following the story, which said investigators discovered evidence executives overvalued assets, underreported credit losses, and misused tax credits. The article cited unnamed sources close to, or who have been involved in, the inquiries.
Fannie Mae stock had been down less than 1 percent before the article was published at about 1320 EDT (1720 GMT), but moved quickly lower. By 1540 EDT (1940 GMT), shares were down more than 9.6 percent in their biggest one-day drop since the market crash of October 1987.
The drop wiped out more than $4 billion of the stock's market value.
Fannie shares were exerting the most negative pressure of any stock in the Standard & Poor's 500 index, although the benchmark index remained modestly higher for the day.
OFHEO is reviewing Fannie Mae's books after accusing the company of misapplying accounting rules. Fannie Mae acknowledged accounting problems, ousted top executives and said it would restate earnings.
Fannie Mae officials were not immediately available for comment.