Jury is Deadlocked in Fannie Mae, Freddie Mac Case

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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.