Plaintiffs in a 2008 class action accusing Fannie Mae of violating federal securities laws have reached a $170 million preliminary settlement with Fannie Mae. Berman DeValerio is co-lead counsel in the case, representing the Massachusetts Pension Reserves Investment Management (PRIM) Board.
The litigation arose from actions that allegedly led to Fannie Mae being placed in conservatorship in 2008. If approved, the agreement would settle investors’ claims that the mortgage purchaser and two former officers made materially false and misleading statements regarding (i) risk controls relating to Fannie Mae’s purchase of certain types of mortgages, including subprime and Alt-A loans, and (ii) Fannie Mae’s exposure to, and the performance of, subprime and Alt-A loans.
“This litigation was extremely hard fought, and complicated by Fannie Mae’s conservatorship,” said Glen DeValerio, the partner who headed Berman DeValerio’s Fannie Mae litigation team, which included Partner Daniel Barenbaum and Associate Justin Saif. “It is worth noting that investors prevailed in spite of the earlier dismissal of similar claims against another Government-Sponsored Enterprise, Freddie Mac.”
The proposed settlement was contained in court papers filed October 24. The PRIM Board and the State-Boston Retirement Board were co-lead plaintiffs representing Fannie Mae’s common shareholders in the case. Owners of preferred stock were represented by the Tennessee Consolidated Retirement System.
“We are proud to have helped negotiate a meaningful recovery for Fannie Mae investors by stepping forward in this case,” PRIM Board Executive Director Michael Trotsky said in a statement. “Pursuing meritorious litigation where we believe we can add value is part of the PRIM Board’s overall strategy to maximize all asset classes in which we are invested, including potential class-action recoveries.”
*In August 2017, our firm name changed to Berman Tabacco. Case references and content published before that date may refer to the firm under our prior name, Berman DeValerio.