Fannie Mae settles shareholder lawsuit for $170 million

By Jonathan Stempel

By Jonathan Stempel

NEW YORK (NEWS.GNOM.ES) – Fannie Mae has reached a $170 million settlement of a lawsuit accusing it of misleading shareholders about its finances, risk management and mortgage exposure before it was seized by the U.S. government during the 2008 financial crisis.

The settlement requires court approval, and was disclosed in a Friday filing with the U.S. District Court in Manhattan.

It allocates $123.8 million to common shareholders and $46.2 million to holders of preferred stock between Nov. 8, 2006 and Sept. 5, 2008.

Fannie Mae and the smaller Freddie Mac were seized by the federal government on Sept. 7, 2008 and put into a conservatorship, where they remain under the control of the Federal Housing Finance Agency.

The FHFA and Fannie Mae did not immediately respond to requests for comment.

Shareholders, who are seeking class action status, alleged that Fannie Mae defrauded them and artificially inflated its stock by issuing false and misleading statements about its risk management, capitalization, accounting practices, and exposure to subprime and low-documentation “Alt-A” mortgages.

The lead plaintiffs are the Massachusetts Pension Reserves Investment Management Board, the State-Boston Retirement Board and the Tennessee Consolidated Retirement System.

They said the settlement averted potential “numerous and substantial risks” of continuing the lawsuit, after similar litigation against Freddie Mac was dismissed last year.

“We’re extremely pleased with the results, particularly in light of the dismissal of a similar lawsuit against Fannie Mae’s sibling company, Freddie Mac,” Daniel Greene, the chairman of State-Boston, said in a statement.

The law firms Labaton Sucharow and Berman DeValerio, which represent common shareholders, and Kaplan Fox Kilsheimer, which represents holders of preferred stock, plan to seek fees of as much as 20 percent of the settlement fund, court papers show.

A separate lawsuit over Fannie Mae’s disclosures was brought in 2011 by the U.S. Securities and Exchange Commission against former Chief Executive Daniel Mudd and former Chief Risk Officer Enrico Dallavecchia, and remains pending.

The SEC filed a similar lawsuit against former Freddie Mac officials, including onetime Chief Executive Richard Syron.

The case is In re: Fannie Mae 2008 Securities Litigation, U.S. District Court, Southern District of New York, No. 08-07831.

(Reporting by Jonathan Stempel in New York; Editing by Chris Reese and Diane Craft)

  • Company Legal & Law Matters
  • Business
  • Fannie Mae
  • Freddie Mac

Exclusive: Ford to overhaul Lincoln brand, this time with big bucks

By Paul Lienert and Bernie Woodall By Paul Lienert and Bernie Woodall DETROIT (NEWS.GNOM.ES) – Ford Motor Co’s new chief executive, Mark Fields, is giving the automaker’s long-moribund Lincoln brand what his predecessor Alan Mulally never could: a little love and a lot of cash. Lincoln, a storied Detroit brand which Ford has owned since 1922, has been in a swoon for the past two decades, leaving dealers and customers wondering if Ford management had left the brand for dead Continue reading

SecurityScorecard CEO to Speak at Advisen Cyber Risk Insight Conference

NEW YORK , Oct. 24, 2014 /NEWS.GNOM.ES/ — Why and how financial institutions must understand all the cyber risks they face as well as those of their business partners will be the topic addressed by Dr. Aleksandr Yampolskiy , CEO and founder of SecurityScorecard Inc., at the Advisen Cyber Risk Insight Conference, to be held October 28 , here. Continue reading

Digital Power Corporation awarded additional $1.6M Defense Export Order

FREMONT, Calif. , Oct. 24, 2014 /NEWS.GNOM.ES/ — Digital Power Corporation (NYSE MKT: DPW) announced that its wholly-owned subsidiary, Digital Power Limited, has secured an additional $1.6M order from the Republic of Korea  to provide uninterruptible power supply (UPS) systems to be fitted to Military Afloat Reach and Sustainability (MARS) tankers being built by Daewoo Shipbuilding and Marine Engineering (DSME). Continue reading

Integrated Sustainability – Calgary Chamber of Commerce Small Business of the Year

Integrated Sustainability Consultants Ltd. Honoured With 2014 Small Business of the Year Award by the Calgary Chamber of Commerce CALGARY , Oct. 24, 2014 /CNW/ – The team at Integrated Sustainability Consultants Ltd Continue reading

SHAREHOLDER ALERT: Brodsky & Smith, LLC Announces Investigation of Cleco Corporation in Connection with the Sale of the Company -CNL

BALA CYNWYD, Pa. Continue reading

iWitness Personal Safety Smartphone Application Readies for International Launch

SEATTLE , Oct. 24, 2014 /NEWS.GNOM.ES/ — Violence and crime are global issues that affect individuals of every age, gender, race, and socioeconomic status. Now, there’s a personal safety app for iOS and Android mobile devices aimed at preventing attacks and safeguarding evidence of any incident. Continue reading

Work Around the Clock: Successfully Building & Managing Global Virtual Teams

CHAPEL HILL, N.C. , Oct Continue reading

Dr. Jason Emer Discusses Celebrity Plastic Surgery Rumors on Scoopla

LOS ANGELES , Oct. 24, 2014 /NEWS.GNOM.ES/ — Leading dermatologic surgeon Dr Continue reading

Golf-PGA president fired for ‘insensitive’ remarks

(NEWS.GNOM.ES) – PGA of America president Ted Bishop was removed from office on Friday by his board of directors for “insensitive gender-based statements” posted on social media at the expense of English golfer Ian Poulter. Bishop on Thursday referred to Poulter as a little girl because of critical remarks written by the Englishman about Nick Faldo and Tom Watson as Ryder Cup captains. Though Bishop later removed his own comments from Twitter and Facebook and said that he “could have selected some different ways” to express his opinion, his statements were deemed to be inconsistent with the policies of the PGA. Continue reading