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Ohio Is First State To Sue Fannie Mae
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But probably not the last.
Ohio Attorney General Jim Petro (R) brought suit against Fannie Mae on Friday in the latest of several legal actions against the nation's largest secondary market lender.
The class-action lawsuit was filed on behalf of the Ohio's public pension funds and other Fannie Mae stockholders and charged that Fannie Mae Corporation and its top executives "manipulated earnings in a fraudulent scheme to deceive investors about (its) true financial state."
Fannie Mae is under investigation by the Securities and Exchange Commission (SEC) and the U.S. Justice Department, accused of manipulating its earnings data, allegedly to trigger bonuses to top executives. The Corporation missed a SEC deadline to file its third quarter earnings last week and has said it may face an after-tax loss of $9 billion as of the end of the third quarter if the SEC finds it has been using improper accounting standards and requires a restatement of earnings.
Two groups of stockholders have also sued Fannie Mae in the last few weeks, and if previous state government originated lawsuits, such as though against tobacco companies, mutual funds, and brokerage houses, are any indication, expect to see many other states follow Ohio's lead.
It will be interesting to see, however, the political affiliation of those state officers who do bring suit. Fannie Mae, and sister firm Freddie Mac, have long been the target of Republicans in Congress who are seeking to increase government oversight of the two giants. Democrats have, of course, taken the opposite tack, defending both corporations vigorously.
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Comments (3)
| Thanks, Ohio from, Ca.
I really liked seeing this today as I googled sue Fanny Mae. As a homeowner of 10 years who purchased a home when one needed good credit, and am lucky enough to be able to afford it, I first thought greedy home owners were to blame for the bubble burst. As I learn more I realize the corrupt carrot dangle of enticement to the taxpayers.These executives should be held accountable for their actions. I hope Ca. joins the suit. |
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| Above Posted By:
Mary Lou
| Mon, 21 Jul 2008 17:19:27 EST |
| The current 2008 fiasco was created by the criminal, Alan Greenspan, who manufactured the giant realestate bubble using Fannie Mae and Freddie Mac. This man should be arrested and the key lost. But.......he's left the country and living in Switzerland. Does he know what he did? Of course he does! Otherwise, why did he run out of the US so fast?
Even in 2007 Federal Budget, the spaces next to Fannie Mae and Freddie Mac WERE BLANK. Did no one raise any questions then? How could that be? No reportings on a FEDERAL BUDGET?????? When I saw that, I knew they were flat out bankrupt. Everything else is under Bush admin. |
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| Above Posted By:
vinnie
| Fri, 11 Jul 2008 19:23:43 EST |
| Go get 'em Ohio. Fannie and their ilk have gotten away with too much for too long. It will take decades to work through the distortions they've caused to our great country's economy. The politicos on their payroll deserve no better treatment. As the RE bubble is liquidated, I'm hopeful the result will be the abolishment of the GSEs rather than the continued unsucessful regulation of these ne’er-do-wells. At their root they represent private profit at the expense of public risk. |
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| Above Posted By:
Jay
| Wed, 14 Jun 2006 12:42:26 EST |
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Why won't the Bush Administration, Senate, Congress concentrate on one thing at a time. Bernanke pointed to deceptive practices as...
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OK, so now they are beginning to make progress on the people who need help retaining their homes...beginning, mind you, just begin...
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Bravo..about time. I would like to see regulation on after the fact loans that are modified after documents have been signed. It i...
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