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Mudd, who was ousted from Fannie Mae in 2008 and is now chief executive of hedge fund Fortress Investment Group LLC , confirmed he received a so-called Wells notice on Friday from the US Securities and Exchange Commission, and said he plans to rebut the allegations, Bloomberg said.
A Wells Notice is a letter from the SEC that warns people or firms the agency is considering a civil action against them.
Mudd could not immediately be reached for comment.