Shareholder Lawsuits Against Fannie Mae and Freddie Mac Dismissed

A U.S. District judge has thrown out four lawsuits from investors in Fannie Mae and Freddie Mac who claimed the federal government illegally forced the companies to pay the Treasury nearly all of its profits, leaving shareholders empty-handed. Judge Royce Lamberth dismissed suits from shareholders including Fairholme Funds and Perry Capital, saying, 'Any sense of unease over the defendants' conduct is not enough to overcome the plain meaning of the Housing and Economic Recovery Act's text.' Compass Point analyst Isaac Boltansky said in a note, 'We believe that Judge Lamberth's ruling represents a material setback for GSE shareholder claims both in court and on Capitol Hill.'

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