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Judge Dismisses Securities Suit Against Freddie Mac

A lawsuit against Freddie Mac over allegations of securities fraud was dismissed by a federal judge, the GSE announced Thursday in a release.


Judge John Keenan of the U.S. District Court for the Southern District of New York, dismissed the claims against Freddie Mac and former senior officials Richard Syron, Patricia L. Cook, and Anthony S. Piszel.

Plaintiffs named in the suit included Central States, Southeast and Southwest Areas Pension Fund, and the National Elevator Industry Pension Plan.

The suit accused Freddie Mac of misleading investors regarding the company's financial strength and its exposure to subprime mortgages.

However, Judge Keenan rejected claims that Freddie Mac's public disclosures of its finances from November 20, 2007 to September 7, 2008 were false or misleading,

According to an article from ""Bloomberg"":http://www.businessweek.com/news/2012-09-27/freddie-mac-wins-dismissal-of-securities-fraud-lawsuit, Judge Keenan said in his ruling that the investors failed to provide enough evidence that Freddie Mac and some of its senior managers had intentions to defraud them.

Previously, in April 2011, the court dismissed the plaintiff's suit, but granted the right to file an amended complaint. Judge Keenan denied the plaintiffs' motion to file an amended complaint for a third time.

About Author: Esther Cho


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