The attorney general of Ohio said
his office was considering bringing a shareholder lawsuit against
mortgage buyer Fannie Mae over disclosures of subprime holdings.
NEW YORK (Reuters) - The attorney general of Ohio said on Wednesday
his office was considering bringing a shareholder lawsuit against
mortgage buyer Fannie Mae over disclosures of subprime holdings.
Attorney General Marc Dann last month sued Freddie Mac, another
government-sponsored housing enterprise, on behalf of the Ohio Public
Employees Retirement System, contending it had engaged in securities
fraud for failing to disclose risks from its investments in the
subprime mortgage market.
"We are looking at Fannie as well," Dann said at the Reuters Housing Summit in New York.
"It appears that they also failed to advise their shareholders of the extent of their subprime holdings," he said.
A Fannie Mae spokeswoman said the mortgage entity does not comment on proposed litigation.
Ohio already is pursuing a pending shareholder lawsuit against
Fannie Mae related to past accounting issues, alleging that it
manipulated earnings to artificially inflate its share price. That suit
was filed in 2004.
The Freddie Mac lawsuit was filed last month in U.S. District Court
for the Northern District of Ohio. The complaint, brought against the
company and its top executives, said the No. 2 U.S. home funding
company had improperly bought risky home loans that dropped in value
and led to big losses for Freddie Mac investors.
(Reporting by Martha Graybow; editing by Jeffrey Benkoe and Gerald E. McCormick)
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