WASHINGTON (dpa-AFX) - The Boston Retirement System announced a $170 million proposed settlement with the Federal National Mortgage Association or Fannie Mae (FNMA.OB) in the securities class action In re Fannie Mae 2008 Securities Litigation.
Boston Retirement System is one of two court-appointed lead plaintiffs for a proposed common shareholder class, along with the Massachusetts Pension Reserves Investment Management, and the Tennessee Consolidated Retirement System is the court-appointed lead plaintiff for a proposed preferred shareholder class. The proposed settlement, subject to court approval, will benefit thousands of class members.
Represented by Labaton Sucharow LLP attorneys Thomas A. Dubbs, Louis Gottlieb, and Thomas G. Hoffman, Jr., Boston Retirement System asserted securities fraud claims against Fannie Mae and two of its former officers on behalf of investors in Fannie Mae during the class period of November 8, 2006 to September 5, 2008.
Specifically, the Boston Retirement System alleged that the defendants violated the Securities Exchange Act of 1934 by making false and misleading statements concerning the company's internal controls and its exposure to subprime and other risky mortgage loan products.Thomas Dubbs, the lead partner on the case, noted the 'risks were indeed substantial, and knowing the outcome in the Freddie Mac case makes this recovery even more significant to us. We're very happy with the result achieved for the class.'
Boston Retirement System further alleged that Fannie Mae's true exposure to these risky assets was revealed in a series of partial disclosures that culminated in the September 7, 2008 announcement by the company's regulator, the Federal Housing and Finance Agency (FHFA), that it had placed the company into conservatorship.
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