A Washington D.C., jury ruled in favor of stockholders who disputed the federal government’s handling of Fannie Mae (OTC:FNMA) and Freddie Mac (OTC:FMCC) during the 2008 financial crisis.
The jury ruled that the Federal Housing Finance Agency (FHFA) acted improperly in 2012 when it directed Fannie Mae and Freddie Mac to send their profits to the federal government rather than make dividend payments to shareholders. The jury awarded shareholders $612 million, which marked the first time that the shareholders scored a legal victory after years of court losses.
The plaintiffs in the trial, Berkley Insurance Co., et al., vs. the Federal Housing Finance Authority, et al., sought $1.6 billion in damages. The jury’s sum will be divided with Fannie Mae paying junior preferred shareholders $299.4 million and Freddie Mac paying $281.8 million; $31.4 million will also be provided to the owners of Freddie Mac’s common shares.
The FHFA issued a statement saying it would review the verdict and determine how to proceed.
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