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Fannie and Freddie Plaintiffs Eye FDIC Share Sales

Stocks in this article: FNMA FMCC

As for the Treasury Department, spokesman Anthony Coley wrote me via email that "as you might imagine, we're fairly limited on what we can say about the GSEs because of active litigation." However, he added, "there have been a number of public statements by Treasury and [Federal Housing Finance Agency] officials, and in annual financial statements filed by both entities, that made the point that the rights of shareholders were suspended and dividends were eliminated."

His email then included several of those statements. But it is highly debatable whether saying the rights of shareholders are suspended and dividends are eliminated during the conservatorship -- which is what the statements say though the italics are mine -- is the same as what that internal Treasury Department memo says.

Still, to make the Treasury's position clear, it is saying the FDIC was aware of the view expressed in the internal memo because everyone was aware. In other words, as Treasury sees it, the view expressed in the memo is no different from any of the other statements Coley sent me, which were available to the public.

So, to summarize: the FDIC says Treasury officials did not inform the regulator of their view, and the Treasury says its view was transparent to the FDIC and everyone else.

Expect those statements to face a great deal of scrutiny in the months to come as the legal battle plays out.

Follow @dan_freed


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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
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