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We will remember & thank judge Sweeney & Lamberth for rest of our life imo. Only attorneys could read this opinion until yesterday, everybody in WH, UST, FHFA, Ackman and other players can also read it now starting today so I’m still not giving up on settlement in next two weeks or before jury’s verdict.
Will get to see it soon if not settled before that happens. This weekend could be busy for govt to figure out how to keep things secret, for which they fought so hard all these yrs, from public & jury. Thanks to Sweeney & Lamberth we came to see few of those docs.
Yes settlement is very very likely to put an end to all court cases, raise the remains capital thru ipo, release gses from cship and that way taxpayers are off the hook in recession that is coming imo. Biggest plus for Govt here is they can keep those thousands of docs sealed forever if they are smart enough.
Its coming this week imo, most of their cases got opinions in 3 months plus or minus few days, have patience, we gonna win Rop soon & Lamberth before 10/21 imo
My friend said he has now 660k shares of Fmcc now….Go Lamberth $17 Bring it jury trial in 3 weeks, no pre trial conf this week so something going on…..
Wish they had called Paulson to testify but since we are fighting 2008 deal in Lamberth ct, I will wait to see him in Kelly’s case when it goes to trial.
3 more weeks for fireworks to start…..new evidence since his ruling in 2018 will add more ammo to our fight. This time we will see what happens when you lie to a judge like Lamberth who is well respected and wants to be known as Mr Integrity after his father.
Haha. Their pref shares were worth $900M, but if they prevail sky is the limit for shareholders.
As analyst Derek Pilecki suggested, the dividends paid on the Treasury draws became, by the Government’s design, deliberately worthless—to the shareholders. Mr. Pilecki stated: “I call the dividend payments on the Treasury’s senior preferred stock Zombie Dividends because Treasury Secretary Paulson wanted the GSEs dead at the time he put them into Conservatorship. He forced them to pay a 10% dividend rate to the Treasury on its senior preferred stock investment. No other financial institution has had to actually pay to the government a 10% rate like the GSEs have.”
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Case 1:21-cv-01949-KCD Document 1 Filed 10/01/21 Page 27 of 45
70. As with any other publicly traded company, owners of Fannie Mae and Freddie Mac stock were vested with specific rights attendant to their ownership. These rights were specifically enumerated in each GSE’s by-laws and the prospectuses and registration statements for each GSE’s common stock and series of preferred stock.
71. The by-laws and offering documents for Fannie Mae’s and Freddie Mac’s common stock enumerated specific rights held by each GSE’s common shareholders, and these rights were typical of those rights usually associated with the private property interest represented by common stock in a shareholder-owned company. For example, these included the right of the GSEs’ common shareholders to transfer their shares of stock and to vote for candidates for boards of directors and shareholder proposals. The owners of Fannie Mae’s and Freddie Mac’s common stock also had the right to receive a portion of the GSEs’ assets in the event of dissolution or liquidation.
From 8/5/22
The parties presented Judge Davis with their proposal to complete briefing on the government's motion to dismiss the Kelly complaint by Jan. 20, 2023, and a copy of that request is attached. Judge Davis entered a paperless order today blessing that briefing schedule. The Kelly Plaintiffs also indicate they plan to retain new counsel.
United States Files Motion to Dismiss
11/1/22
Plaintiffs File Response to United States’ Motion to Dismiss 12/13/22
United States Files Reply in Support of Its Motion to Dismiss
1/20/23
On March 19, 2008, OFHEO (at Treasury’s behest) eased capital restraints on the GSEs in exchange for the agreement of the GSEs to raise significant capital at some undetermined point in the future. This change exacerbated the accumulation of high-risk holdings by the GSEs. Requiring the GSEs to take such risky steps reveals, in hindsight, that the Government was laying the groundwork to impose a conservatorship apart from whether conservatorship could be lawfully imposed under HERA. As detailed by author Timothy Howard in The Mortgage Wars, the former CFO of Fannie Mae later stated that Treasury Secretary Henry Paulson’s “action to not just allow but actually encourage Fannie Mae and Freddie Mac to add new mortgages with no firm commitment to raise capital to back them is understandable only if by then he had concluded that Treasury would be able to use the road map from the GSE insolvency paper . . . to put the GSEs into receivership or conservatorship.”
43. Although not publicly revealed until 2011, throughout the summer of 2008, the Government continued to destabilize the GSEs through press leaks and leaks to Wall Street executives and hedge fund managers that GSE conservatorship was imminent. This included a meeting between Secretary Paulson and Wall Street executives before the passage of HERA in which Secretary Paulson revealed that the GSEs would be placed into conservatorship. Barron’s published a second article based on information from White House sources predicted an imminent takeover of the GSEs on August 18, 2008. As discussed below, the Government takeover did not occur immediately as Secretary Paulson tried to suggest in the leaks. Furthermore, there were no statutory grounds to impose a conservatorship. But these leaks, as the Government intended, caused GSE share price to drop significantly. This is classic governmental conduct preceding a governmental nationalization or massive expropriation.
3 days of the week gone still nothing on Lamberth’s calendar for our pre trial conf, seems like they are cooking something imo, do you also smell something delicious being made for us? ;)
Plaintiff Michael E. Kelly (“Mr. Kelly”) is CEO and sole common shareholder of Plaintiff FBOP Corporation (“FBOP”). FBOP was a bank holding company that held nine banks: (1) Park National Bank; (2) San Diego National Bank; (3) Pacific National Bank; (4) BankUSA; (5) North Houston Bank; (6) Madison State Bank; (7) Community Bank of Lemont; (8) Citizens National Bank; and (9) California National Bank (“FBOP Subsidiaries”).
FBOP has standing and asserts claims for relief on behalf of the FBOP Subsidiaries, which owned $898,448,392 in GSE preferred shares when the conservatorships were unlawfully imposed on the GSEs on September 6, 2008.
The imposition of the conservatorships violated Plaintiffs’ constitutional rights under the Fifth Amendment, as well as Plaintiffs’ contractual rights. Based on the facts set forth herein, Plaintiffs assert three causes of action: (1) unlawful taking and/or illegal exaction, as a direct claim; (2) unlawful taking and/or illegal exaction, alternatively as a derivative claim; and (3) breach of implied regulatory contract.
Although the Government purported to gain the consent of the GSEs’ boards, that consent was invalid, as it was obtained by coercion and given only under duress.
5. The immediate impact of the Government’s actions on September 6 and 7 was to deprive the private shareholders, including Plaintiffs, of their property rights as shareholders, including the loss of their dividend and voting rights, and to destroy the economic value of the shares themselves. Given the Government’s efforts to encourage banks such as the FBOP Subsidiaries and River Capital to invest in the GSEs, the Government’s destruction of the shareholders’ rights and the value of their property was a dramatic departure from Plaintiffs’ reasonable expectations when they purchased the GSE shares.
Financial Crisis and Imposition of the Conservatorships ......................................14
1. HERA Allowed the FHFA to Impose a Conservatorship Only if
Specific Statutory Requirements Were Satisfied.......................................14
2. The Conservatorships Were Imposed in Violation of HERA by
Coercing the Boards’ Consent ...................................................................18
3. The Conservatorships Eliminated Shareholder Rights and Destroyed Shareholder Value......................................................................................23
4. Foreign Investment in the GSEs Pressured the Government to Impose Conservatorships Despite the Lack of Any Ground Under HERA ...........26
5. The Government Bypassed Lawful Options to Impose the Conservatorships ........................................................................................27
E. FBOP Subsidiaries and FBOP Failed Due to the Conservatorships’
Destruction of Shareholder Value..........................................................................28
From Kelly’s case, hope he wins…..discovery also from 2008 was allowed by Sweeney for Wash Fed plaintiffs
Briefed with new evidence of what government officials were thinking at the time, Judge Lamberth changed his tune in 2018, paving the way for Fairholme to bring a claim for breach of implied covenant of good faith and fair dealing. “So while Plaintiffs could reasonably expect the GSEs to exercise discretion as it relates to dividends, they could not expect the GSEs to extinguish the possibility of dividends arbitrarily or unreasonably,” he wrote. “And at the nascent of a sustained period of profitability, Plaintiffs would have reasonably expected the GSEs to be moving out of conservatorship, not doubling down by executing the Net Worth Sweep.”
Next month, the sides are scheduled to meet in court. As with Musk, the cases should show that no one is above the law – not the richest man in the world, nor the U.S. government.
Dont forget to add……(kudos to our lawyers for not giving up on this case)
9800 docs/23k pages Lamberth ordered govt to hand over to plaintiffs in Dec 2020
Also
The parties tell Judge Lamberth FHFA and the GSEs have turned over 65,000 documents consisting of more than 650,000 pages since Aug. 7, 2019, in addition to extensive privilege logs.
My friend said he is buying another 250k-300k shares today if you see it, its him just fyi :)
Its coming….$17…evidence including this haven’t evaporated. First trial & jury & Lamberth as judge is like icing on the cake here imo
Fruits of settlement were not ripe until now, delays & patience will pay off bcoz common will have at least half the dilution when ipo is announced imo
Glass is half full
Thanks for info, always good idea to rent it first whether it’s boat or RV or private jet, then decide whether it’s really worth buying bcoz it comes with headache
I have all fmcc common and most important to me I know what I hold & whats its value is. Time will tell who wins & who looses but Im optimist & confident as always just like few others here.
Statistically 90% of all lawsuits filed are settled before trial. Of the 10% of the cases that go to trial 90% of them settle before verdict. Therefore, a very small percentage of cases are ever tried to conclusion.
https://www.google.com/search?q=pre+trial+settlement+by+federal+government&client=safari&channel=iphone_bm&ei=qPcoY4WfAfXdptQPp7WfqAU&oq=pre+trial+settlement+by+federal+government&gs_lcp=Cgdnd3Mtd2l6EAEYADIFCCEQqwIyBQghEKsCMgUIIRCrAjoKCAAQRxDWBBCwAzoKCCEQwwQQChCgAToECCEQCkoECEEYAEoECEYYAFCOD1jeImCFNmgBcAF4AIABiAGIAZEHkgEDMS43mAEAoAEByAEIwAEB&sclient=gws-wiz
Let’s hope so, it makes sense, since Lovelace vs Medstar case is scheduled for pre trial conf on 10/21 even though it’s jury trial is scheduled for 11/28
Plus Lamberth calendar is filled with other cases from 10/21 to end of the year, so I’m guessing we will have only 4 days for our trial and not two weeks.
Please show when did they steal $150B from shareholders? Things never happened before does not mean it can’t happen when there is so many lawsuits & pressure from all the sides. Govt need to win them all, we need to win only one.
From $10M to $3.3B, good to follow someone like Ackman whose strategy is to create value for all shareholders
F&F can be WSJ front page story/star hedge fund performer of the year & he knows it too.
Mr Pressure is on our side so I believe where there is Bill, there is a way…I wouldn’t give up on settlement chances here, it will be cheaper for govt than jury award imo.
Meet Mr. Pressure
By Jonathan R. Laing
Dec. 5, 2005 12:01 am ET
BY HIS OWN ADMISSION, HEDGE-FUND MANAGER William Ackman was nearly roadkill two years ago. In late 2002, the bad performance of some private-equity investments had forced him to begin liquidating his once highflying hedge fund, Gotham Partners. Only adding to his humiliation, he and Gotham had become primary targets of high-profile investigations by both New York Attorney General Eliot Spitzer and the Securities and Exchange Commission into abusive hedge-fund trading tactics. The financial press that had long lionized Ackman turned on him with a vengeance. The grim situation even impelled his long-time partner, David Berkowitz, to leave Gotham for a private money-management job. "As a result of the probes, I couldn't attract new money and had to content myself with just liquidating Gotham Partners," he recalled ruefully during a wide-ranging interview recently at his mid-Manhattan office. But by late 2003, the investigations had run their course without finding that he had done anything wrong. Indeed, the investment manager helped to persuade the regulators to scrutinize his primary antagonist, bond-insurance giant MBIA (ticker: MBI), for some of the accounting abuses that he'd said it had committed. Likewise, most of the erstwhile investors in Gotham proved eager to stake him yet again, as long as he stayed away from private-equity deals and concentrated instead on the publicly traded markets, where he'd enjoyed so much success.
So in January 2004, he came back as the general partner of a new hedge-fund organization, Pershing Square Capital Management, capitalized with $10 million of his own money and a $50 million grubstake from respected strategic investor Leucadia National. Then, at the beginning of 2005, he opened the fund to outside investors, attracting some $220 million atop the $15 million he and fellow employees had rolled into Pershing Square. His funds under management have since swelled to over $1 billion, fueled by new capital infusions and strong performance. Net returns hit 42.6% in 2004 and more than 30% this year, according to investment results independently obtained by Barron's. "What I'm most proud of is that all five of my investors that got into Gotham in 2002, and therefore lost money, decided to re-up in Pershing and have been made whole," he says.
https://www.wsj.com/articles/SB113356721431912937
My friend who bought 400k shares said he is thinking to buy 300k more. I told him I ran out of cash by buying truckload at above $2
30 more days……for verdict by 10/20…..bring it….
Not yet but did attend boat show, so already have in mind the one I liked & would luv to own. Also attended RV show for the same reason.
Sure, will do.
So dont expect $153 to $170 besides $17, anything under that amount is not out of range of jury to award us imo
More on Punitive damages…..
Although the Court has declined to "impose a bright-line ratio which a punitive damages award cannot exceed," it has concluded that "in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process." State Farm, 538 U.S. at 425. Following the Court's guidance, the Supreme Court of California has explained that "ratios between the punitive damages award and the plaintiff's actual or potential compensatory damages significantly greater than 9 or 10 to 1 are suspect and, absent special justification . . . , cannot survive appellate scrutiny under the due process clause." Simon v. San Paolo U.S. Holding Co., 35 Cal. 4th 1159, 1182 (2005).
https://www.manatt.com/insights/newsletters/healthcare-litigation/california-supreme-court-clarifies-constitutional#:~:text=To%20ensure%20that%20unconstitutional%20punishment,the%20actual%20or%20potential%20harm
If you remain a Class Member, and Plaintiffs obtain money or benefits as a result of a trial or as part of a settlement between Defendants and Plaintiffs, you will be notified about how to claim your applicable share.
http://fannie-freddieclassaction.com//FileDownload.aspx?FileID=8427
Who knows I may get chance to take selfie with Ackman in those 4 days kept open on Lamberth’s calendar for us.
13-cv-1053: FAIRHOLME FUNDS, INC. et al v. FEDERAL HOUSING FINANCE AGENCY, et al Judge Royce C. Lamberth 10/17/2022 10:00AM Courtroom 15- In Person Jury Trial
13-mc-1288: IN RE: FANNIE MAE/FREDDIE MAC SENIOR PREFERRED STOCK PURCHASE AGREEMENT CLASS ACTION LITIGATIONS Judge Royce C. Lamberth 10/17/2022 10:00AM Courtroom 15- In Person Jury Trial
19-cv-1154: LOVELACE v. MEDSTAR HEALTH, INC. et al Judge Royce C. Lamberth 10/21/2022 10:00AM Courtroom 15- In Person Final Pretrial Conference
I am planning to attend it too. Can’t miss “the most illegal act of scale” type of case. Had chance to take selfie at Freddie head qtr yesterday, it will come handy in 30 days :)
Activist fund manager Bill Ackman described his investment in mortgage giants Fannie (FNMA)Mae and Freddie Mac as the most interesting since he acquired a stake in General Growth Properties Inc. in 2008.
Ackman’s Pershing Square Capital Management LP said on Nov. 15 that it had bought a 9.98 percent stake in the common shares of Fannie Mae that aren’t owned by the government, as well as a 9.77 percent stake in the Freddie Mac shares available to the public. The firm may seek talks with shareholders, management and the government, which owns almost 80 percent of the agencies since bailing them out.
Enlarge imageActivist Investor Bill Ackman
Activist investor Bill Ackman. Photographer: Scott Eells/Bloomberg
“Fannie Freddie is a little more dynamic situation where the opportunity for profit is to make multiples of your money, if you can come up with a solution to a problem that has vexed Congress and the Treasury I think since the crisis,” Ackman said in an interview today with Bloomberg Television’sStephanie Ruhle. “This is the most interesting investment I’ve seen since my investment in General Growth.”
The fund manager helped rescue General Growth from near-collapse by pushing it to file for bankruptcy in 2009, when he also won a board seat. The effort “turned $60 million into $1.6 billion,” he told Bloomberg News in 2011.
Ackman comments: back in Nov 2013
We're not supportive of Berkowitz's plan...
We're not ready to discuss our investments in Fannie and Freddie. We're not tipping our hand. We're in listen mode...Here's the biggest clue I will give you: the taxpayer owns 80% of FnF through the warrants. There is no scenario possible where we benefit and taxpayers do not... Government is not going to test something that doesn't work, not going to interfere and endanger the current system... We know a fair amount... FnF are our most interesting investment yet. We don't trade - we invest... We convinced Berkowitz to take a position in commons.We believe greater opportunity exists in commons. The opportunity to make profit to multiples of your money. Opportunity for profit greatly outweighs risk... Government is not going to make a decision based on whether or not hedge funds are involved in the process. Conservatorship is not sustainable. I was in the mortgage brokerage business and I am a student of FnF and the restructuring.
Ackman was asked by Stephanie on Bloomberg tv when he bought FnF common in 2014, why common not pref? His answer was “simply greater potential”
Calendar: 10/17/2022-11/15/2022
Case Number and Title Judge Time Courtroom Purpose
13-cv-1053: FAIRHOLME FUNDS, INC. et al v. FEDERAL HOUSING FINANCE AGENCY, et al Judge Royce C. Lamberth 10/17/2022 10:00AM Courtroom 15- In Person Jury Trial
13-mc-1288: IN RE: FANNIE MAE/FREDDIE MAC SENIOR PREFERRED STOCK PURCHASE AGREEMENT CLASS ACTION LITIGATIONS Judge Royce C. Lamberth 10/17/2022 10:00AM Courtroom 15- In Person Jury Trial
19-cv-1154: LOVELACE v. MEDSTAR HEALTH, INC. et al Judge Royce C. Lamberth 10/21/2022 10:00AM Courtroom 15- In Person Final Pretrial Conference
21-cr-0149: USA v. UPTMORE Judge Royce C. Lamberth 10/25/2022 03:00PM Courtroom 15- In Person Sentencing
21-cr-0149: USA v. UPTMORE Judge Royce C. Lamberth 10/25/2022 03:00PM Courtroom 15- In Person Sentencing
20-cr-0194: USA v. MADZARAC Judge Royce C. Lamberth 10/28/2022 12:30PM Telephonic/VTC Status Conference
22-cr-0097: USA v. FOREMAN Judge Royce C. Lamberth 11/01/2022 10:00AM Courtroom 15- In Person Jury Selection
22-cr-0097: USA v. FOREMAN Judge Royce C. Lamberth 11/01/2022 10:00AM Courtroom 15- In Person Jury Trial
19-cr-0307: USA v. SMITH Judge Royce C. Lamberth 11/14/2022 10:00AM Courtroom 15- In Person Sentencing