Law360: Judge Trims Fannie, Freddie Investors’ Stock Profit Suit
September 23, 2022
US District Judge Royce C. Lamberth granted Fannie Mae and Freddie Mac partial summary judgement in a class action brought by private shareholders alleging that the government illegally liquidated the mortgage companies through an amendment implemented after Fannie and Freddie were placed in conservatorship. The amendment ordered Fannie and Freddie to give their net worth to the government instead of 10% fixed dividend payments that were previously required. “No genuine dispute remains on the fact of harm on the theory that plaintiffs were denied dividends that they otherwise were reasonably certain to receive, and insofar as plaintiffs’ proposed alternative remedy of rescission and restitution is barred as a matter of law,” Judge Lamberth said. The Federal National Mortgage Association, or Fannie Mae, is represented by Meaghan VerGow of O’Melveny & Myers LLP.
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