As if the news couldn't get any worse, it has now been revealed that the FBI is investigating four major US financial institutions whose collapses helped to trigger a proposed $700 billion government bailout plan by the Bush administration. Law enforcement officials speaking with the Associated Press on Tuesday revealed that the FBI is looking at potential fraud by mortgage finance heavyweights Fannie Mae and Freddie Mac, and international insurer American International Group Inc. Lehman Brothers Holdings Inc. is also under investigation.

The FBI investigations will focus on the financial institutions, as well as the individuals that ran them. According to officials, these new inquiries bring the number of corporate lenders under investigation over the past year up to 26.

As the housing market has collapsed over the past year, the FBI has opened a large-scale probe of companies within the financial sector. They're looking at everyone from mortgage lenders to investment banks that bundle home loans into securities sold to investors.

Last week FBI Director Robert Mueller said the number of large financial firms under investigation was at 24. Mueller has also previously said that the FBI probes in the financial services industry were mainly focused on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments.

These newly revealed FBI investigations come as Congress meets to decide whether or not to approve emergency legislation that would give the US government $700 billion dollars and the broad power to purchase devalued assets from troubled financial institutions. The Bush administrations bailout proposal aims to help unlock credit, as well as stabilize shaken markets not only in the US, but also around the world.fbi