Shareholders, understandably irate, claimed the sum of their losses amounted to $1.6 billion.
Their argument: these hasty actions left them high and dry, stripping away any hope of dividend payouts in the future.
However, the jury, playing the role of Solomon, decided to award them just under a third of their claim.
The Lingering Shadows of 2008
This lawsuit wasn’t just about profits; it was a ghost from the past.
The 2008 housing market crash led Congress to launch the Housing and Economic Recovery Act (HERA).
This act, much like a guardian appointed to watch over two troubled teenagers, enabled the FHFA to oversee Fannie Mae and Freddie Mac as needed.
A temporary conservatorship was established.
As 2012 approached, it seemed both companies had weathered the storm, hinting at a possible escape from conservatorship by 2020.
But then came the controversial “net worth sweep” in August 2012.
Shareholders assert this was a calculated move by officials to keep the two giants from ever standing tall again, permanently chaining them to the aftermath of the financial crisis.
