Fannie Mae Investors Can’t Sue Over Some Securities Fraud Claims
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Investors can’t pursue some of their securities-fraud claims against Fannie Mae in a lawsuit accusing the government-controlled mortgage financier of recklessly disregarding the deterioration of the U.S. housing market.
U.S. District Judge Paul A. Crotty in New York yesterday granted Fannie Mae’s request to dismiss claims that it misrepresented its exposure to subprime and Alt-A mortgages, two types of home loans that contributed to more than $1.8 trillion in worldwide financial losses and asset writedowns. Shareholders are allowed to proceed with allegations that Fannie Mae misled them about its internal controls and risk management practices.