US judge tosses lawsuit against Freddie Mac

Judge tosses shareholder suit accusing Freddie Mac of securities fraud for understating risk

Associated Press

WASHINGTON (AP) -- A federal judge has tossed out a lawsuit against Freddie Mac that accused the mortgage giant and three top executives of understating the level of risky mortgages the company held before the housing bubble burst.

U.S. District Judge John Keenan in New York City dismissed the class-action suit filed by several shareholders accusing Freddie Mac and the former executives of civil securities fraud. Keenan said the company reported full and accurate information to investors during the period in question, from Nov. 20, 2007, to Sept. 7, 2008.

The Securities and Exchange Commission filed charges in December alleging similar violations against Freddie Mac, its sibling Fannie Mae and six former executives of the companies. That suit is still pending.

The government rescued Fannie and Freddie in 2008 after they incurred massive losses on risky mortgages.

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