2018-02-20 — reuters.com
The U.S. Supreme Court on Tuesday declined to revive litigation in which shareholders accused the federal government of overstepping its authority when it restructured mortgage finance firms Fannie Mae and Freddie Mac following the 2008 housing crisis. The justices left in place a lower court's 2017 ruling that the investors, led by hedge fund Perry Capital, could not pursue legal claims accusing the government of unlawfully channeling profits from Fannie Mae and Freddie Mac to the U.S. Treasury Department.
Other shareholders that sued included Fairholme Funds Incand individual investors. Another hedge fund, Pershing Square Capital Management LP, the biggest common shareholder in both companies, filed a brief asking the justices to take the case.
The appeals court said the government had the authority under a 2008 law that laid the groundwork for its seizure of the two companies.
Both companies are now under the conservatorship of the Federal Housing Finance Agency. Treasury Secretary Steven Mnuchin had said before taking office last year that the companies should be returned to private control but has since said that they should not be privatized.
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