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On Friday, November 4, 2022, a federal jury in Washington D.C. deliberated for nearly eighteen hours, before announcing a deadlock. The case is based on claims from shareholders that the companies altered their stock agreements. By altering these documents, the U.S. Treasury was given false information regarding the companies' profits. The "net worth sweep"alterations took place in 2012, which had the effect of increasing the companies' dividends from 10%  to 100% total investment of the companies' net worths. In return, the shareholders have filed a lawsuit for $1.6 billion in damages for breach of implied covenant of good faith and fair dealing when the officials altered the stock agreements. This dollar amount is equivalent to the amount of the companies' decline from the day Freddie Mac's and Fannie Mae's alterations became final. T

he Federal Housing Finance Agency (FHFA) claims that the alterations were "necessary" for survival of the companies. Defense used this argument during their closing arguments, which lasted two full days. During the closing arguments, the attorneys representing FHFA asked the jury to think what they would do if they found themselves in the same situation as the officials - faced with the reality that that the future of the companies were at stake.

In response, the shareholders told the jurors that the officials of the companies failed to provide the shareholders with any sort of information regarding the stock alteration or its consequences. The shareholders were told nothing about the stake of the company or the alterations to the agreement. While on the stand, Former Director of Federal Housing Finance Agency, Edward DeMarco, admitted that the officials didn't even consult their own accountants or economists before they decided to make the alterations in 2012.

After the alterations, by the middle of 2012, both Freddie Mac and Fannie Mae were already showing significant signs of turn-around and profit. Along with the increase in profits, the U.S. Treasury's Department's investments also increased. In 2008, The Treasury put nearly $192 billion into an investment, and in return received over $385 billion.

This deadlock is not the first time the jury has returned without a decision, and an attorney for the shareholders filed a motion for a mistrial. This was rejected. The jury will return on Monday, November 7, 2022.

The case is In re: Fannie Mae/Freddie Mac Senior Preferred Stock Purchase Agreement Class Action Litigation, case number 1:13-mc-01288, in the U.S. District Court for the District of Columbia.