Agency officials did not identify the companies under investigation but said the wide-ranging probe, which began early last year, involved companies across the industry, from mortgage lenders to financial firms that bundled home loans into securities sold to investors.

The FBI is working in conjunction with the Securities and Exchange Commission (SEC), Mr Neil Power, chief of the FBI's economic crimes unit in Washington, said during a briefing to reporters.

The development came as the authorities in New York and Connecticut were investigating whether Wall Street banks hid crucial information about high-risk loans bundled into securities that were sold to investors.

Mr Power said federal authorities were looking into the practices of so-called sub-prime lenders, as well as potential accounting fraud committed by financial firms that held these loans on their books or securitised them and sold them to other investors.

Referring to certain unnamed bankrupt sub-prime lenders, Mr Power said there were 'some irregularities there that we're looking into', including the timing of stock sales by executives.

Dozens of sub-prime lenders have filed for bankruptcy in the past year, most prominently New Century Financial.

Mr Power also said law enforcement officials were looking at whether homebuilders manipulated financial statements to inflate revenues.

An SEC spokesman declined to comment. The agency has said about three dozen investigations related to the mortgage market meltdown are ongoing.

Defaults on sub-prime loans have risen over the past 12 months and are primarily responsible for the credit crunch that has disrupted global financial markets.

Morgan Stanley, Goldman Sachs and Bear Stearns all disclosed in regulatory filings on Tuesday that they were cooperating with requests for information from various, but unspecified, regulatory and government agencies. Officials at the companies either declined to comment or could not immediately be reached.

ASSOCIATED PRESS