July 12 (Reuters) - Arbor Realty Trust ( ABR ) is being

probed by federal prosecutors and the Federal Bureau of

Investigation in New York months after short sellers attacked

the lender's practices and disclosures, Bloomberg News reported

on Friday.

Shares of the company fell more than 19% in afternoon

trading.

In 2023, short sellers, including Viceroy Research and NINGI

Research, published reports alleging that Arbor Realty Trust ( ABR ),

which invests in a diversified portfolio of structured finance

assets, had a distressed loan book.

Viceroy Research claimed that Arbor's underlying collateral

for the loans is vastly overstated, adding that the loans do not

qualify for refinancing anywhere and are nearing maturity.

NINGI Research accused the company of concealing a 'toxic'

real estate portfolio of mobile homes with 'a complex web' of

real and fake holding companies for over a decade.

"We routinely cooperate with regulatory inquiries and are

very confident that we conduct ourselves properly. We look

forward to our second-quarter earnings call," Arbor responded in

an email to Reuters.

Arbor has countered these short reports, asserting that

the reports contain 'numerous inaccuracies' and 'misstatements'.

Federal investigators are now probing the New York-based

company's lending practices and its claims about the performance

of its loan book, Bloomberg reported, citing sources familiar

with the matter.

The Department of Justice did not immediately respond to

Reuters request for comment.