Gerald Silk, partner at Bernstein Litowitz Berger & Grossmann, tells Global Pensions that the firm has had a number of inquiries by pension systems about potential litigation related to the Fannie Mae and Freddie Mac “debacle.”
The article notes that bringing securities class actions involving these companies will be impacted by the unprecedented intervention of the federal government, which has created a conservatorship.
Silk is quoted as stating that any action against “Freddie or Fannie would be more difficult for legal reasons and because the government owns it now. Therefore, investors are going to have to look for other sources to recover on their losses.” However, senior management of the two companies and third parties such as accounting firms and investment banks remain potential defendants.
As discussed here, the case recently filed related to Freddie Mac names the company’s chairman Stephen Ashley, ex-chief executive officer Daniel Mudd and two other former executives, but not Freddie Mac itself.
