More lawsuits come. Read below
Spector Roseman Kodroff & Willis, P.C. (SRKW), and Hagens Berman Sobol Shapiro (Hagens Berman), two of the nation's leading class-action law firms, have filed a lawsuit against the United States government on behalf of a proposed class of investors who held common and preferred stock in the Federal National Mortgage Association (OTCBB: FNMA) (Fannie Mae), and the Federal Home Loan Mortgage Corporation (OTCBB: FMCC) (Freddie Mac) on or before Sept. 5, 2008.
The lawsuit - filed June 10, 2013 -- alleges that the U.S. government violated the Fifth Amendment of the U.S. Constitution when, in 2008, it imposed conservatorships over Fannie Mae and Freddie Mac - both private, shareholder-owned corporations - and allegedly destroyed the value of stock held by shareholders without due process or just compensation.
Prior to the U.S. government imposing conservatorships, Fannie Mae and Freddie Mac had operated successfully for decades. Then, according to the lawsuit, the U.S. government took control of Fannie Mae and Freddie Mac away from shareholders and directed the companies to purchase subprime and other risky mortgages, leading to significant losses.
"The U.S. government paid no heed to the rights and interests of shareholders when it effectively nationalized these two corporations," said attorney Robert M. Roseman, managing partner of SRKW. "While other major financial institutions were attempting to minimize their losses during a difficult economy, the government essentially forced Fannie Mae and Freddie Mac to do the exact opposite, expanding their exposure to some of the riskiest assets."
The lawsuit also claims that the government unlawfully entered into stock agreements executed at the time of the conservatorships that established a grossly unfair lending arrangement by issuing the government senior preferred shares worth billions of dollars and gave the government a right to acquire nearly 80 percent ownership in both Fannie Mae an
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Yes, the US Federal Court can do that; however, there are damages, they have standing, it's the proper venue and if a Con Law question arises, it goes to the SJC. Congress will be hard pressed to do something and fast. IMO
all this attention on the courts "throwing out the case" and how "it holds no merit". is completely absurd. Your going tell me the government can profit off a company that is publicly traded, and have zero risk???? lets not even get into the fact that FHFA has a fiduciary responsibility to the share holders, but also are a government agency. hmmm conflict of interest...
RICHEYDOUGLAS and his shorty-cronies forgot that it was the govt who put Fannie in trouble in the 1st place by having it meddle in the subprime mortgage arena !!!....So the govt OWES it to the people to fix its own mess !!!!
Of course they will the lawsuit is without merit. The two gse's would have filed bankruptcy in 2008 if it was not for the government using 190 billion taxpayer dollars to bail them out... congress just needs to keep its word now and act fast to end this absurd crony capitalist lunacy.