Federal Home Loan Mortgage Corporation (Freddie Mac) (NYSE: FRE) Investor Securities Class Action Lawsuit 08/15/2008

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Company Name(s): 
Federal Home Loan Mortgage Corp.(Freddie Mac)
Case Name: 
Federal Home Loan Mortgage Corp.(Freddie Mac) Shareholder Class Action Lawsuit 08/15/2008
Case Status: 
Case Dismissed
Affected Securities
NYSE: FRE
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
08/15/2008
Class Period Begin: 
11/20/2007
Class Period End: 
09/07/2008
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
10/17/2008
Case Dismissed: 
01/16/2014
Summary: 

January 6, 2014 - The U.S. Court of Appeals for the Second Circuit affirmed the judgement of the district court.

October 26, 2012 - The lead plaintiff filed a notice of appeal.

September 26, 2012 - The court granted the defendants' motion to dismiss and denied the plaintiffs' leave to file an amended complaint.

July 18, 2011 - The lead plaintiff filed a second amended consolidated complaint.

March 30, 2011 - The court granted defendants' motions to dismiss and granted plaintiffs leave to file an amended complaint.

February 24, 2010 - Defendants filed a motion to dismiss.

May 19, 2009 - The lead plaintiff filed an amended consolidated complaint on behalf of investors who purchased Federal Home Loan Mortgage Corporation (NYSE: FRE) common shares between November 20, 2007 and September 7, 2008. The lead plaintiff alleges that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between November 20, 2007 and September 7, 2008.

November 24, 2008 - The lead plaintiff and lead counsel were appointed.

October 17, 2008 - Lead plaintiff motions were filed.

August 15, 2008 - An investor in shares of Federal Home Loan Mortgage Corporation (NYSE: FRE now trading on the OTC sheets as FMCC) filed a lawsuit in the U.S.District Court for the Southern District of New York against Federal Home Loan Mortgage Corporation (Freddie Mac) over alleged violations of Federal Securities Laws.

According to the complaint the plaintiff charges Federal Home Loan Mortgage Corporation and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that between November 21, 2007 and August 5, 2008 defendants issued materially false and misleading statements regarding Federal Home Loan Mortgage Corporation's business and financial results.

The Complaint alleges that Federal Home Loan Mortgage Corporation 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. Federal Home Loan Mortgage Corporation's (NYSE: FRE) common shares which traded in the $30 range in late 2007 have been decimated by the subsequent revelations of Federal Home Loan Mortgage Corporation's losses and write-downs, so that Federal Home Loan Mortgage Corporation 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.