Ohio AG Considers Fannie Mae Case

By Martha Graybow, Reuters  |  Posted 2008-02-20 Email Print this article Print
 
 
 
 
 
 
 

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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