NEW YORK (TheStreet) -- The Obama Administration is unlikely to try and settle shareholder lawsuits over Fannie Mae (FNMA) and Freddie Mac (FMCC), notwithstanding the potential for continued embarrassing revelations that could inflict political damage on the President, argues Ralph Nader.
"I think they'll just run out the clock to 2016, just like they're not really doing anything about restructuring. Well, because, you know, everything is going smoothly, you know, as far as the industry of housing, and they know they'll create a hornet's nest and have to expend capital, and why should they do that? You know, you know how politicians operate," Nader told TheStreet in an interview this week. The storied consumer advocate and occasional third party presidential candidate owns shares of Fannie and Freddie, and has criticized the government for ignoring the rights of shareholders since putting the government sponsored enterprises into conservatorship in 2008. Along with deep-pocketed investors such as Perry Capital and Fairholme Funds, Nader has been arguing the government needs to recognize the rights of shareholders, instead of sending all the profits of the government sponsored entities to the Treasury.
Lawsuits against the government brought by Perry and Fairholme are among nearly 20 in all filed against the government by shareholders in the GSEs
A Treasury Department spokesman declined to respond to Nader's comments.
--Written by Dan Freed in New York