Case Page

 

Case Status:    DISMISSED    
On or around 01/07/2014 (Other)

Filing Date: August 15, 2008

The original class action alleging violations of the federal securities law against the Federal Home Loan Mortgage Corporation (NYSE:FRE) ("Freddie Mac" or the "Company") and certain of its officers and directors on behalf of purchasers of Freddie Mac securities from November 21, 2007 through August 5, 2008 was filed on August 15, 2008.

The Complaint alleges that the Company misled investors as to the soundness of the Company's mortgage portfolio, its underwriting standards and the adequacy of its capital. It took on massive exposure to subprime and other non-traditional risky loans and under-reserved for bad loans and sub-prime investments leading to delayed asset write-downs. Freddie Mac common shares which traded in the $30 range in late 2007 have been decimated by the subsequent revelations of the
Company's losses and write-downs, so that Freddie Mac common shares are now trading below $6, wiping out hundreds of millions of dollars in shareholder value. Due to the continuing deteriorating situation, there have been suggestions that a government bail-out might be necessary.

On November 24, 2008, Judge John F. Keenan signed the Opinion and Order #96784 granting the motion to appoint the Central States Southeast and Southwest Areas Pension Fund as lead plaintiff and approved lead plaintiff’s choice of Coughlin Stoia Geller Rudman & Robbins LLP as lead counsel. In February 2009, orders were entered allowing for a motion to stay. On May 19, 2009, the lead plaintiff filed an Amended Consolidated Complaint. On February 24, 2010, the defendants filed a motion to dismiss the Amended Consolidated Complaint.

According to the Opinion and Order signed by Judge John F. Keenan on March 30, 2011, Because Plaintiffs have failed adequately to plead the existence of actionable misstatements or omissions of fact relating to Freddie Mac's exposure to non-prime mortgage loans or its capital adequacy, and because they have failed to plead loss causation with respect to their claims relating to Freddie Mac's internal controls and financial statements, Freddie Mac's and the Individual Defendants' motions to dismiss Plaintiffs' Section 10(b) of the '34 Act and SEC Rule 10 b-5 claims are both granted. Additionally, because the validity of a Section 20(a) claim against a "controlling person" depends on the existence of a valid claim against the allegedly controlled person, and because Plaintiffs have failed to state a claim against Freddie Mac, the Individual Defendants' motion to dismiss Plaintiffs' claims under Section 20(a) of the '34 Act is granted. Plaintiffs are granted sixty (60) days from the date of this Opinion & Order to file a Second Amended Complaint.

On July 18, 2011, the plaintiffs filed Second Amended Consolidated Class Action Complaint.

On September 24, 2012, the Court issued an Order granting the Defendants' motion to dismiss the Second Amended Complaint with prejudice. The Clerk of Court was directed to close this case.

COMPANY INFORMATION:

Sector: Financial
Industry: Consumer Financial Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: FRE
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 08-CV-07281
JUDGE: Hon. John F. Keenan
DATE FILED: 08/15/2008
CLASS PERIOD START: 11/21/2007
CLASS PERIOD END: 08/05/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Berman DeValerio Pease & Tabacco PC
    One Liberty Square, Berman DeValerio Pease & Tabacco PC, MA 02109
    617.542.8300 ·
  2. Paskowitz & Associates
    60 East 42nd Street, 46th Floor, Paskowitz & Associates, NY 10165
    212.685.0969 212.685.2306 · classattorney@aol.com
  3. Roy Jacobs & Associates (New York)
    350 Fifth Avenue Suite 3000 , Roy Jacobs & Associates (New York), NY 10118
    · classattorney@pipeline.com
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 08-CV-07281
JUDGE: Hon. John F. Keenan
DATE FILED: 07/18/2011
CLASS PERIOD START: 11/20/2007
CLASS PERIOD END: 09/07/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Robbins Geller Rudman & Dowd LLP (San Diego)
    655 West Broadway, Suite 1900, Robbins Geller Rudman & Dowd LLP (San Diego), CA 92101
    619.231.1058 619.231.7423 ·
  2. Robbins Geller Rudman & Dowd LLP (Boca Raton)
    120 East Palmetto Park Road, Suite 500, Robbins Geller Rudman & Dowd LLP (Boca Raton), FL 33432
    561.750.3000 561.750.3364 ·
  3. Robbins Geller Rudman & Dowd LLP (Melville)
    58 South Service Road, Suite 200, Robbins Geller Rudman & Dowd LLP (Melville), NY 11747
    631.367.7100 631.367.1173 ·
No Document Title Filing Date
No Document Title Filing Date