A key provision of the Housing and Economic Recovery Act of 2008 appears to protect board members at Fannie Mae and Freddie Mac from at least some litigation related to the bailout of the companies by the U.S. government. The Blog of Legal Times reports that a provision in that act that states that “[t]he members of the board of directors of a regulated entity shall not be liable to the shareholders or creditors of the regulated entity for acquiescing in or consenting in good faith to the appointment of the Agency as conservator or receiver for that regulated entity.”
Richard Ferlauto of AFSCME told the BLT that he still believes that pension funds are actively examining ways to hold directors liable for not appropriately providing guidance, and that he expects investors will find a way to pursue these cases.
[…] discussed here earlier, a provision of the Housing and Economic Recovery Act of 2008 appears to protect board […]