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This board often reminds me of the stories I used to hear as a kid while learning survival skills in the woods. You know the ones about the folks who died from thirst 1/4 mile away from a river, or from exposure 1/2 mi from an interstate highway?
$FNMA. It's all there, no one can do it for you.
Yes, but they can only do it if we continue to let them.
$fnma!
There is no "government" money, there is only and always "tax payer" money.
The mere fact that people unconsciously assume this is as much a testament to the pervasive corruption as the willful violation of constitutional rights.
It's our money, we the people money, so all the more reason to allow it to be returned and leave F and F alone!
Q's typically are not audited. The annual is. Besides, what's to audit?
The value here is a clean and virtually debt free company that is a reverse merger candidate.
How does a stock with great fundamentals but does not trade for even book value per share conform to any trading patterns? How can technical analysis have any validity here? It can't be trusted. There is every bit as much chance for it to double in one day as it has to drop .50 in a day or run to $10 who knows.
This whole stock's value is manipulated, by the gov, by the mm, by you? The stock will be turned out like a hooker in a one horse town until there is a definitive political resolution. There is nothing but manipulation to make it go up or down either wildly or quietly until then.
Incorrect. There is a huge political powder keg here. 2014 congressional elections start basically this fall which for a departing incumbent in the White House is ostensibly the start of the 2016 presidential race. This is also crucial for a GOP that is floundering to reconcile its own identity.
Neither party can afford any additional erosion of partisan support and at a time where everything from Benghazi to the IRS to the NSA scandal to F and F are blowing up in their faces.
So please explain how you think that either party can afford to ignore what is both a) a very hot button issue and at the same time b) an issue that could be easily spun into a huge win for both parties. Oh and I might add that c) is also an issue that if mishandled by the gov could easily derail the housing and greater economic recovery especially in light of today's report of the Fed's intent of easing the long standing stimulus injections and intent of raising interest rates.
Anyone thinking this through on both a practical level and as a political leverage point can see that the only real choice is to settle and return the company to the shareholders period/end.
Are you for real? The govt used strong arm negotiation tactics and attempted to create a scapegoat for the 2008 financial meltdown by using F and F as the fall guys. There is a mountain of evidence to support this. Additionally the FHFA has successfully prosecuted the banks for their deception of F and F and intends to continue this to the tune of an additional $190b. Oh wait, then there is the legal precedent set by AIG and Sally Mae lawsuits against the gov.
And not to mention the specific language of the law that defines F and F as a private corporation set up under a federal charter and what rights it is entitled to and what the written legal obligation of the conservator is.
Everything in the case file is already backed up by either legal case precedent or constitutional law.
Did you actually read the document or ate you just here to badger people?
$FNMA!
People need to think before they enter in over their head and freak out. Like tourists at Waimea Bay every winter that see the 30' waves breaking in the bay then think its a good idea to walk down to the waters edge for a closer look. 20 seconds later they get hit by Mack truck sized shore break like a load of wet cement.
Ahh good times! There is no substitute for doing your own dd
The world is different for those that see the big picture. Humans are funny in their ignorance of their own intelligence. If all of life was one big painting of the New York City skyline some people would swear to you that life is a painting of the Chrysler building or the Empire State Building or perhaps time square or all of The lower east side based on their limited perspective. Sure all of those buildings are in the painting of life but they are not the total of the painting of life they are merely all that those folks can handle seeing.
Very few have the ability to expand their perspective and see that life indeed is a much bigger picture.
But those other guys will surely fight you tooth and nail because by god, they see what they see.
Patience. There are those among us that can not see, yet!
Fnma$
NSS from margin accounts. This is how the MMs "create liquidity" irrespective of the simple laws of supply vs demand economics.
It's funny how they rob folks. That's because the victim actually is complicit in the robbery.
See, some folks as in the market as in life are carrying a CW or are trained in self defense. They don't put shares out to be liberated from them do to sniveling weakness. My shares nor my CW gets put on the table until I decide to put them there.
You don't have to live scared its a choice some make.
New day, new tactic. That's all any of this sideways crap is. Consolidation can happen in days, hours, minutes...this is like after hours for employees at the amusement park.
They go to the play book, you know the one that gives all of the historical head fakes and rug pulling to fleece retail and flippers of their shares?
I would think the current news of lawsuit against the gov might tip the scales a bit. We'll see.
It's about time some attorneys in this country did something refreshing that actually preserves and protects the Constitution that provides the framework for liberty and justice for all. Now if the journalist could only remember where they left their balls at....this nation has strayed a long way from the commitment to truth and justice in the ilk of Woodward and Bernstein.
I don't need luck. I have sold dd and a firm grasp on how politics works. Oh, and then there are my 0$ cost average shares I am holding as I have been in from under $1 to over $5 and have been able to add to that along the way like soooooo many others here that did not listen to poor advice from doomsday promoters.
Paulson and Co and Berkowitz are not big money? I think your browser isn't working correctly, might want to catch up here. Big money is already in and has been shaking the tree. I guess you are waiting for the big neon sign from god to give you the buy nod? Good luck with that strategy.
We will see now wont we? What, one day and you think that's as far as that news is going to reach? Well, aren't you precious?
No bid oh oy! Where are all those "you'll seers" go? Where are all of Angel's dopey Angels?
Really? Because case precedent from AIG and others says differently. As a matter of actual fact the lawsuit is pumped up on steroids and despite representing shareholders of record prior to 2008 will further establish case precedent that effects all current shareholders. All of the mitigating events that show causation for this case effect current shareholders 100 %.
What's more is that this case is coupled with other very disturbing accusations of willful abandonment of Constitutional law.
This $hit storm is exactly what this country needs to rid itself of this puppet NWO administration.
That's because everyone in their poll are so scared. Of what? These same a holes are afraid of their own shadow. They used to say that, "there is nothing to fear but fear itself", and that is true beyond most people's comprehension but you can also add that there is nothing to fear but fear itself AND your government". And what is our government? It is supposed to be an extension of the will of the people right? But rather than that it is an extension of the fear and greed of the people. The greed of the powerful controlling the fear of the weak.
Every dead president of this great nation is rolling in their graves. Every fallen soldier who fought for freedom is rolling in their grave. And we the living are such pussys that we don't do a thing about it but bitch.
"That's wrinkle" should be "rat's wrinkle". Even the gd iPhone thinks its in the 10% club. Stupid auto correct.
Perhaps a court decision may be years away but there is no way that this political balloon is going to go on for years without popping first. It's way too much of a hot button issue for both parties. We are on the cusp of 2014 elections which by all means is the start of the greater race for the White House in 2016. The current administration is embroiled in numerous battles in their defiance of constitutional law. They deserve every bit of it too. But how many battles on how many fronts can they wage? How long until they need to take a knee on something in order to reel in some public favor in light of some terrifying allegations that are probably 100% true?
But hey keep using high school style superlative requisites for electing our leadership and this is what you get.
The world will always be 10% thinkers and 90% that think they are in the 10%. Good luck with that.
The point is not whether this administration gives a that's wrinkle!! The point is that the GD people of this nation SHOULD give a rat's wrinkle!!
You think you are making a point here loudmouth? Do something about it other than pointing out the illegal actions of a run away administration. Start a class action suit. Join a class action suit. Go out and be a part of the solution and get active while you still have that right. And really what is your point? Are you cheerleading for the corrupt administration? Because by sitting on the sidelines casting dispersions that is all you are doing. By joining in support of the lawsuit you are empowering those against what you purport to despise. How old are you? Are you a child or just another American adult stuck in a perpetual state of "arrested development"?
You have a choice to stop being a victim!
Why lol? That's how they win. Perhaps some "instant gratification seekers" could learn something about real wealth creation and preservation.
Not necessarily and even if that were the case there will surely be leaks that will encourage a public response. This battle may be fought officially in the courtroom but will undoubtedly spill out on both Wall St and Main St. Hence all the minions hurriedly scribbling away to put out contrarian opinion to sway the markets.
This is despicable human behavior. I'm sure there is a word in many languages to describe this, "little war" but no matter how eloquently the aristocrats try to disguise this behavior with words it is a war fought by those too old, and frail to use real valor or courage. In not so sure that for a period we shouldn't just use guns and swords just to rid the place of the scourge of humanity.
That a result of the "me generation". There is no real Gen x or "y". Perhaps a "why" generation exists amidst the "MEs" but ever since the 70's its all about me and f everyone and everything. The 60's opened the door with all the communist psycho babble and the MEs ran right through it. Every self indulgent 50 something worried about getting their hormone replacement and HGH dosage is to blame. It's their children, (you college kids) that will either be the more self indulging demise of our nation or those that were given everything but love that will lead us back to a path of healing.
Reading this board is enough to make many vomit. 1 out of pure disgust, 2 from the sad display of character that this cross section of America says about us all.
Name a country where the legal system fits your Utopian idealism.
The legal system in the US provides for justice to be served. The constitution preserves us that. If you and all the other lazy and complacent constituents want to play Monday morning barrister while blasting the only legal system in the world that can be changed by activism then you will get exactly what you criticize.
Be a part of the solution or else you are just another part of the problem.
Mark this post. Very soon there will be a CURRENT investor class action suit. And by the amazing grace of our legal system the present suit will set the precedent. How do you really think that's going to go there Sherlock?
I know. His response was listed under yours. Was responding to him. Realized after the fact.
Are you joking? This is the pre curser to a bevy of class action suits. Let's see how the Maobama administration likes the heat as it gets turned up on every front from Benghazi, to Syria, to IRS, to NSS domestic spying, to FNMA.
All you watch closely now while the trash starts to get taken out.
They are sec reporting. Margin calls do happen on OTCBB stocks as they are protected by REG SHO.
I think you have this confused with pink sheets. Fnma is OTCBB not OTC pink
It is a great step and consider that this is only a small group of investors. Get ready for the flood gates of class action suits to be filed.
Lets see, Benghazi, IRS, Rosen, NSS domestic spying, yep Obama administration right on schedule in completely disregarding the US Constitution. They need this like a hole in the head but they sure do deserve it.
Please read the legal case reference just posted. You won't sound lie such a moron afterward.
A friend of mine on FB posted this. If already posted in the past, please skip.
"Here is a court case that everyone MUST read. I cannot stress the importance of this case enough. It lays the foundation as to why the conservator CANNOT simply liquidate Fannie Mae.
"The case was called Herron v. Fannie Mae. It was decided in April of 2012.
"Here are some key portions:
"When a federally chartered financial institution (such as a national bank, federal savings association, or government-sponsored enterprise) encounters financial distress, it does not
go through bankruptcy. Instead, it is placed into federal conservatorship or receivership. The conservator or receiver takes over the day-to-day operations and assumes the powers of shareholders, board of directors, and management. The purpose of the conservator or receiver is to restore the entity to fiscal feasibility or to liquidate and distribute its assets.
"The conservator or receiver steps into the private status of the entity. For example, when the Federal Deposit Insurance Corporation (“FDIC”) takes over as conservator or receiver for a failed bank, it obtains the rights and powers of the bank’s shareholders, officers, and directors. See 12 U.S.C. § 1821(d)(2)(A). As conservator or receiver, it may take over the assets and operation of the insured depository institution to conduct all of the institution’s business, in order to preserve and conserve the assets and property of Fannie Mae. Id. § 1821(d)(2)(B). FDIC in its role as conservator or receiver is placed “in the shoes of the insolvent” entity. O’Melveny & Myers v. FDIC, 512 U.S. 79, 86-87 (1994) (examining 12 U.S.C. § 1821(d)(2)(A) & (B)).
"A claim against FDIC as receiver is “a claim against the depository institution for which the FDIC is receiver.” Am. Nat’l Ins. Co. v. FDIC, 642 F.3d 1137, 1144 (D.C. Cir. 2011). Further, when acting as receiver, FDIC does not pursue the interests of the government.
Atherton v. FDIC, 519 U.S. 213, 225 (1997). Courts have similarly held that FDIC as conservator was not acting for the United States. See, e.g., Ameristar Fin. Servicing Co. LLC v. United States, 75 Fed. Cl. 807, 811 (2007).
"O’Melveny interpreted the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”), 12 U.S.C. 1461 et seq., the statute applicable to FDIC. Section 1821(d)(2)(A) & (B) of FIRREA, regarding the power and rights of conservators and receivers, is almost identical to § 4617(b)(2)(A) & (B) of HERA.
"When FHFA steps in as conservator or receiver it immediately succeeds to all rights and powers of the stockholders, officers, and directors of the regulated entity placed into such conservatorship or receivership. 12 U.S.C. § 4617(b)(2)(A). In like manner, on September 6, 2008, FHFA placed Fannie Mae into conservatorship. As conservator, FHFA took over the assets and operations of Fannie Mae with all the powers of the shareholders,
officers, and directors to conduct all of Fannie Mae’s business, in order to preserve and conserve the assets and property of Fannie Mae. See id. § 4617(b)(2)(B). Thus, like FDIC when it serves as a conservator or receiver of a private entity, FHFA when it serves as conservator “step[s] into the shoes” of the private corporation, Fannie Mae.
"In such circumstances, the federal agency in its guise as a conservator or receiver of a private corporation is not a government actor. For example, in United States v. Beszborn, 21 F.3d 62, 67-68 (5th Cir. 1994), the Fifth Circuit held that the Resolution Trust Corporation (“RTC”) as receiver of a failed bank was not a government actor. The RTC had sued the former officers and directors of the failed bank in a civil case and obtained a judgment including punitive damages. The government subsequently brought criminal charges against the officers and directors based on the same conduct. The officers and directors asserted Double Jeopardy as a defense. The Fifth Circuit found that the RTC as receiver stood in the shoes of the insolvent bank, i.e., that the RTC was a private entity and not the government for purposes of the Double Jeopardy clause. 21 F.3d at 68.
"Ms. Herron fails in her attempt to distinguish O’Melveny. She argues that FHFA should be treated differently than FDIC because FHFA acts as both regulator and conservator for Fannie Mae and FDIC only acts as conservator (or receiver). Ms. Herron overlooks critical facts. FDIC also serves as regulator of state-chartered banks that are not members of the federal reserve system.
"When one of these banks goes into conservatorship, FDIC serves as both regulator and conservator. Even with regard to federally
chartered institutions for which the Office of the Comptroller of the Currency has primary regulatory authority, such institutions must submit to FDIC regulation including FDIC “backup examination
authority.” Id. at 165.
"Similarly, Fannie Mae was not converted into a government entity when it was placed into conservatorship; instead, FHFA stepped into the shoes of Fannie Mae. FHFA as conservator for
Fannie Mae is not a government actor.
"Ms. Herron avers that Fannie Mae is a federal actor for the purpose of her First Amendment claim because: (1) the conservatorship is of indefinite duration; (2) FHFA presently
controls Fannie Mae; and (3) Treasury provides financial support to Fannie Mae in exchange for non-voting Senior Preferred Stock. Ms. Herron draws the wrong conclusion from these three
uncontested facts.
"Fannie Mae would be a federal actor if the FHFA conservatorship retained for the government permanent authority to appoint a majority of the corporation’s directors. Lebron, 513 U.S. at 400. To the contrary, the appointment of FHFA as conservator did not establish permanent government authority to control Fannie Mae.
First, Ms. Herron insists that there is no date certain when the conservatorship of Fannie Mae will end, and, therefore, she erroneously concludes that FHFA control over Fannie Mae
must be permanent.
"In order to be a government actor under the Lebron framework, permanent government control is required. Lebron itself distinguishes permanent from temporary control. The
Supreme Court contrasted Amtrak, which was a federal actor in the permanent control of the Ms. Herron unsuccessfully attempts to distinguish Beszborn, asserting that the RTC in that case operated to benefit the creditors and stockholders and asserting that FHFA operates Fannie Mae to benefit the federal government.
"This reflects an incorrect understanding of the facts. Treasury’s
interest in Fannie Mae is as a shareholder of Senior Preferred Stock. FHFA operates Fannie Mae to benefit of creditors and shareholders, in the same way that RTC operated the failed financial institution in Beszborn. 11 See Pl.’s Opp. [Dkt. 55] at 41 (“[T]he record evidence is undisputed that the conservatorship is of indefinite duration, and that neither FHFA nor Fannie Mae knows when or how it will end.”)
"Although the duration of the conservatorship is indefinite, FHFA’s control over Fannie Mae is temporary. Fannie Mae was not
a federal actor at the relevant time.
"Second, Ms. Herron asserts that FHFA’s complete control over Fannie Mae makes Fannie Mae a federal actor. Congress empowered FHFA to act as conservator of Fannie Mae for the
purpose of reorganizing, rehabilitating, or winding up its affairs. 12 U.S.C. § 4617(a)(2). Thus, the enabling statute expressly allows FHFA temporary but complete control over Fannie Mae, not
permanent control. See also Stip. ¶ 67 (citing Fannie Mae, Form 8-K filed with the SEC at 2 (Dec. 24, 2008) (conservatorship of Fannie Mae has no specified termination date)); Stip. ¶ 156 (citing
OMB, Fiscal Year 2012; Analytical Perspectives, Budget of the U.S. Government at 373 (Feb. 14, 2011) (budget reflects Fannie Mae as a non-budgetary entity in keeping with its temporary status in
conservatorship)); Stip ¶ 38 (quoting FHFA Fact Sheet: Questions and Answers on Conservatorship at 2 (Sept. 7, 2008) (there is no exact time frame that can be given as to when the conservatorship
of Fannie Mae might end)).
"The complete control exercised by FHFA is authorized by statute; it is how conservatorship is accomplished. Because conservatorship is by nature temporary, the government has not acceded to permanent control over the entity and Fannie Mae remains a private corporation.
"Finally, Ms. Herron also argues that Fannie Mae was transformed into a federal entity via (1) Treasury’s appointment of Fannie Mae as administrator of the Home Affordable Modification Program through the Financial Agency Agreement and (2) Treasury’s entry into the Stock Agreement with Fannie Mae. With regard to the Financial Agency Agreement, it states that Fannie Mae is
distinct from the government and must maintain a fiduciary duty of loyalty to the federal government. Stip. ¶ 146 (citing Financial Agency Agreement at 3-4). The Financial Agency Agreement also expressly provides that contractors to Fannie Mae (such as Ms. Herron) do not become subcontractors of the government. Stip. ¶ 147 (citing Financial Agency Agreement §14(B)).
"These provisions make it clear that the Financial Agency Agreement did not transform Fannie Mae into a government entity.
The Stock Agreement did not give the government permanent control over Fannie Mae. The Stock Agreement provided Treasury with a warrant to purchase 79.9% of the total shares of Fannie Mae common stock outstanding on the date of exercise at a nominal price. Stip. ¶ 93 (citing Fannie Mae Form 10-K for 2009 at 331-32 (Feb. 26, 2010)).
"As of this date, Treasury has not exercised this warrant. The Stock Agreement also required Treasury to provide funding to
Fannie Mae to ensure a positive net worth in exchange for shares of Senior Preferred Stock that pay a certain dividend. Stip. ¶ 55 (citing Treasury Fact Sheet: Treasury Senior Preferred Stock Purchase Agreements at 1-2 (Sept. 7, 2008)). Senior Preferred Stock conferred no voting rights. Id. Thus, Treasury’s warrant to purchase common stock and its ownership of non-voting Senior Preferred Stock do not give the United States permanent control over Fannie Mae and do not make Fannie Mae a government entity under Lebron.
"Ms. Herron also relies on Brentwood Academy v. Tennessee Secondary Sch. Athletic Ass’n, 531 U.S. 288 (2001), arguing that the government is so entwined with Fannie Mae as to have
created a public entity subject to constitutional restrictions. Under Brentwood, the Supreme Court held that an athletic association in which the majority of members were public schools could be deemed to be a federal actor because the association was pervasively entwined with government policies and was managed and controlled by government officials in their government capacity. Id. at 299-301. Brentwood did not change the law of conservatorship and receivership. As described above, a conservator or receiver steps into the shoes of the private entity — it assumes the private status of the entity. See O’Melveny, 512 U.S. at 86-87; Am. Nat’l Ins. Co., 642 F.3d at 1144;
Beszborn, 21 F.3d at 67-68.
"Fannie Mae was a private entity; when FHFA took over as conservator of Fannie Mae, it stepped into Fannie Mae’s private role. In sum, FHFA as conservator of Fannie Mae is not a government actor, and Ms. Herron’s Bivens claim will be dismissed."
Why the conservator CANNOT simply liquidate Fannie Mae
Be careful when you say " it's a drill".
In America of late all "drills" seem to coincide with actual incidents. Funny that, considering all the wire tapping and eavesdropping the government employs.
Wrong. Educate yourself.
"Here is a court case that everyone MUST read. I cannot stress the importance of this case enough. It lays the foundation as to why the conservator CANNOT simply liquidate Fannie Mae.
"The case was called Herron v. Fannie Mae. It was decided in April of 2012.
"Here are some key portions:
"When a federally chartered financial institution (such as a national bank, federal savings association, or government-sponsored enterprise) encounters financial distress, it does not
go through bankruptcy. Instead, it is placed into federal conservatorship or receivership. The conservator or receiver takes over the day-to-day operations and assumes the powers of shareholders, board of directors, and management. The purpose of the conservator or receiver is to restore the entity to fiscal feasibility or to liquidate and distribute its assets.
"The conservator or receiver steps into the private status of the entity. For example, when the Federal Deposit Insurance Corporation (“FDIC”) takes over as conservator or receiver for a failed bank, it obtains the rights and powers of the bank’s shareholders, officers, and directors. See 12 U.S.C. § 1821(d)(2)(A). As conservator or receiver, it may take over the assets and operation of the insured depository institution to conduct all of the institution’s business, in order to preserve and conserve the assets and property of Fannie Mae. Id. § 1821(d)(2)(B). FDIC in its role as conservator or receiver is placed “in the shoes of the insolvent” entity. O’Melveny & Myers v. FDIC, 512 U.S. 79, 86-87 (1994) (examining 12 U.S.C. § 1821(d)(2)(A) & (B)).
"A claim against FDIC as receiver is “a claim against the depository institution for which the FDIC is receiver.” Am. Nat’l Ins. Co. v. FDIC, 642 F.3d 1137, 1144 (D.C. Cir. 2011). Further, when acting as receiver, FDIC does not pursue the interests of the government.
Atherton v. FDIC, 519 U.S. 213, 225 (1997). Courts have similarly held that FDIC as conservator was not acting for the United States. See, e.g., Ameristar Fin. Servicing Co. LLC v. United States, 75 Fed. Cl. 807, 811 (2007).
"O’Melveny interpreted the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”), 12 U.S.C. 1461 et seq., the statute applicable to FDIC. Section 1821(d)(2)(A) & (B) of FIRREA, regarding the power and rights of conservators and receivers, is almost identical to § 4617(b)(2)(A) & (B) of HERA.
"When FHFA steps in as conservator or receiver it immediately succeeds to all rights and powers of the stockholders, officers, and directors of the regulated entity placed into such conservatorship or receivership. 12 U.S.C. § 4617(b)(2)(A). In like manner, on September 6, 2008, FHFA placed Fannie Mae into conservatorship. As conservator, FHFA took over the assets and operations of Fannie Mae with all the powers of the shareholders,
officers, and directors to conduct all of Fannie Mae’s business, in order to preserve and conserve the assets and property of Fannie Mae. See id. § 4617(b)(2)(B). Thus, like FDIC when it serves as a conservator or receiver of a private entity, FHFA when it serves as conservator “step[s] into the shoes” of the private corporation, Fannie Mae.
"In such circumstances, the federal agency in its guise as a conservator or receiver of a private corporation is not a government actor. For example, in United States v. Beszborn, 21 F.3d 62, 67-68 (5th Cir. 1994), the Fifth Circuit held that the Resolution Trust Corporation (“RTC”) as receiver of a failed bank was not a government actor. The RTC had sued the former officers and directors of the failed bank in a civil case and obtained a judgment including punitive damages. The government subsequently brought criminal charges against the officers and directors based on the same conduct. The officers and directors asserted Double Jeopardy as a defense. The Fifth Circuit found that the RTC as receiver stood in the shoes of the insolvent bank, i.e., that the RTC was a private entity and not the government for purposes of the Double Jeopardy clause. 21 F.3d at 68.
"Ms. Herron fails in her attempt to distinguish O’Melveny. She argues that FHFA should be treated differently than FDIC because FHFA acts as both regulator and conservator for Fannie Mae and FDIC only acts as conservator (or receiver). Ms. Herron overlooks critical facts. FDIC also serves as regulator of state-chartered banks that are not members of the federal reserve system.
"When one of these banks goes into conservatorship, FDIC serves as both regulator and conservator. Even with regard to federally
chartered institutions for which the Office of the Comptroller of the Currency has primary regulatory authority, such institutions must submit to FDIC regulation including FDIC “backup examination
authority.” Id. at 165.
"Similarly, Fannie Mae was not converted into a government entity when it was placed into conservatorship; instead, FHFA stepped into the shoes of Fannie Mae. FHFA as conservator for
Fannie Mae is not a government actor.
"Ms. Herron avers that Fannie Mae is a federal actor for the purpose of her First Amendment claim because: (1) the conservatorship is of indefinite duration; (2) FHFA presently
controls Fannie Mae; and (3) Treasury provides financial support to Fannie Mae in exchange for non-voting Senior Preferred Stock. Ms. Herron draws the wrong conclusion from these three
uncontested facts.
"Fannie Mae would be a federal actor if the FHFA conservatorship retained for the government permanent authority to appoint a majority of the corporation’s directors. Lebron, 513 U.S. at 400. To the contrary, the appointment of FHFA as conservator did not establish permanent government authority to control Fannie Mae.
First, Ms. Herron insists that there is no date certain when the conservatorship of Fannie Mae will end, and, therefore, she erroneously concludes that FHFA control over Fannie Mae
must be permanent.
"In order to be a government actor under the Lebron framework, permanent government control is required. Lebron itself distinguishes permanent from temporary control. The
Supreme Court contrasted Amtrak, which was a federal actor in the permanent control of the Ms. Herron unsuccessfully attempts to distinguish Beszborn, asserting that the RTC in that case operated to benefit the creditors and stockholders and asserting that FHFA operates Fannie Mae to benefit the federal government.
"This reflects an incorrect understanding of the facts. Treasury’s
interest in Fannie Mae is as a shareholder of Senior Preferred Stock. FHFA operates Fannie Mae to benefit of creditors and shareholders, in the same way that RTC operated the failed financial institution in Beszborn. 11 See Pl.’s Opp. [Dkt. 55] at 41 (“[T]he record evidence is undisputed that the conservatorship is of indefinite duration, and that neither FHFA nor Fannie Mae knows when or how it will end.”)
"Although the duration of the conservatorship is indefinite, FHFA’s control over Fannie Mae is temporary. Fannie Mae was not
a federal actor at the relevant time.
"Second, Ms. Herron asserts that FHFA’s complete control over Fannie Mae makes Fannie Mae a federal actor. Congress empowered FHFA to act as conservator of Fannie Mae for the
purpose of reorganizing, rehabilitating, or winding up its affairs. 12 U.S.C. § 4617(a)(2). Thus, the enabling statute expressly allows FHFA temporary but complete control over Fannie Mae, not
permanent control. See also Stip. ¶ 67 (citing Fannie Mae, Form 8-K filed with the SEC at 2 (Dec. 24, 2008) (conservatorship of Fannie Mae has no specified termination date)); Stip. ¶ 156 (citing
OMB, Fiscal Year 2012; Analytical Perspectives, Budget of the U.S. Government at 373 (Feb. 14, 2011) (budget reflects Fannie Mae as a non-budgetary entity in keeping with its temporary status in
conservatorship)); Stip ¶ 38 (quoting FHFA Fact Sheet: Questions and Answers on Conservatorship at 2 (Sept. 7, 2008) (there is no exact time frame that can be given as to when the conservatorship
of Fannie Mae might end)).
"The complete control exercised by FHFA is authorized by statute; it is how conservatorship is accomplished. Because conservatorship is by nature temporary, the government has not acceded to permanent control over the entity and Fannie Mae remains a private corporation.
"Finally, Ms. Herron also argues that Fannie Mae was transformed into a federal entity via (1) Treasury’s appointment of Fannie Mae as administrator of the Home Affordable Modification Program through the Financial Agency Agreement and (2) Treasury’s entry into the Stock Agreement with Fannie Mae. With regard to the Financial Agency Agreement, it states that Fannie Mae is
distinct from the government and must maintain a fiduciary duty of loyalty to the federal government. Stip. ¶ 146 (citing Financial Agency Agreement at 3-4). The Financial Agency Agreement also expressly provides that contractors to Fannie Mae (such as Ms. Herron) do not become subcontractors of the government. Stip. ¶ 147 (citing Financial Agency Agreement §14(B)).
"These provisions make it clear that the Financial Agency Agreement did not transform Fannie Mae into a government entity.
The Stock Agreement did not give the government permanent control over Fannie Mae. The Stock Agreement provided Treasury with a warrant to purchase 79.9% of the total shares of Fannie Mae common stock outstanding on the date of exercise at a nominal price. Stip. ¶ 93 (citing Fannie Mae Form 10-K for 2009 at 331-32 (Feb. 26, 2010)).
"As of this date, Treasury has not exercised this warrant. The Stock Agreement also required Treasury to provide funding to
Fannie Mae to ensure a positive net worth in exchange for shares of Senior Preferred Stock that pay a certain dividend. Stip. ¶ 55 (citing Treasury Fact Sheet: Treasury Senior Preferred Stock Purchase Agreements at 1-2 (Sept. 7, 2008)). Senior Preferred Stock conferred no voting rights. Id. Thus, Treasury’s warrant to purchase common stock and its ownership of non-voting Senior Preferred Stock do not give the United States permanent control over Fannie Mae and do not make Fannie Mae a government entity under Lebron.
"Ms. Herron also relies on Brentwood Academy v. Tennessee Secondary Sch. Athletic Ass’n, 531 U.S. 288 (2001), arguing that the government is so entwined with Fannie Mae as to have
created a public entity subject to constitutional restrictions. Under Brentwood, the Supreme Court held that an athletic association in which the majority of members were public schools could be deemed to be a federal actor because the association was pervasively entwined with government policies and was managed and controlled by government officials in their government capacity. Id. at 299-301. Brentwood did not change the law of conservatorship and receivership. As described above, a conservator or receiver steps into the shoes of the private entity — it assumes the private status of the entity. See O’Melveny, 512 U.S. at 86-87; Am. Nat’l Ins. Co., 642 F.3d at 1144;
Beszborn, 21 F.3d at 67-68.
"Fannie Mae was a private entity; when FHFA took over as conservator of Fannie Mae, it stepped into Fannie Mae’s private role. In sum, FHFA as conservator of Fannie Mae is not a government actor, and Ms. Herron’s Bivens claim will be dismissed."
Why the conservator CANNOT simply liquidate Fannie Mae
Incorrect:
"Here is a court case that everyone MUST read. I cannot stress the importance of this case enough. It lays the foundation as to why the conservator CANNOT simply liquidate Fannie Mae.
"The case was called Herron v. Fannie Mae. It was decided in April of 2012.
"Here are some key portions:
"When a federally chartered financial institution (such as a national bank, federal savings association, or government-sponsored enterprise) encounters financial distress, it does not
go through bankruptcy. Instead, it is placed into federal conservatorship or receivership. The conservator or receiver takes over the day-to-day operations and assumes the powers of shareholders, board of directors, and management. The purpose of the conservator or receiver is to restore the entity to fiscal feasibility or to liquidate and distribute its assets.
"The conservator or receiver steps into the private status of the entity. For example, when the Federal Deposit Insurance Corporation (“FDIC”) takes over as conservator or receiver for a failed bank, it obtains the rights and powers of the bank’s shareholders, officers, and directors. See 12 U.S.C. § 1821(d)(2)(A). As conservator or receiver, it may take over the assets and operation of the insured depository institution to conduct all of the institution’s business, in order to preserve and conserve the assets and property of Fannie Mae. Id. § 1821(d)(2)(B). FDIC in its role as conservator or receiver is placed “in the shoes of the insolvent” entity. O’Melveny & Myers v. FDIC, 512 U.S. 79, 86-87 (1994) (examining 12 U.S.C. § 1821(d)(2)(A) & (B)).
"A claim against FDIC as receiver is “a claim against the depository institution for which the FDIC is receiver.” Am. Nat’l Ins. Co. v. FDIC, 642 F.3d 1137, 1144 (D.C. Cir. 2011). Further, when acting as receiver, FDIC does not pursue the interests of the government.
Atherton v. FDIC, 519 U.S. 213, 225 (1997). Courts have similarly held that FDIC as conservator was not acting for the United States. See, e.g., Ameristar Fin. Servicing Co. LLC v. United States, 75 Fed. Cl. 807, 811 (2007).
"O’Melveny interpreted the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”), 12 U.S.C. 1461 et seq., the statute applicable to FDIC. Section 1821(d)(2)(A) & (B) of FIRREA, regarding the power and rights of conservators and receivers, is almost identical to § 4617(b)(2)(A) & (B) of HERA.
"When FHFA steps in as conservator or receiver it immediately succeeds to all rights and powers of the stockholders, officers, and directors of the regulated entity placed into such conservatorship or receivership. 12 U.S.C. § 4617(b)(2)(A). In like manner, on September 6, 2008, FHFA placed Fannie Mae into conservatorship. As conservator, FHFA took over the assets and operations of Fannie Mae with all the powers of the shareholders,
officers, and directors to conduct all of Fannie Mae’s business, in order to preserve and conserve the assets and property of Fannie Mae. See id. § 4617(b)(2)(B). Thus, like FDIC when it serves as a conservator or receiver of a private entity, FHFA when it serves as conservator “step[s] into the shoes” of the private corporation, Fannie Mae.
"In such circumstances, the federal agency in its guise as a conservator or receiver of a private corporation is not a government actor. For example, in United States v. Beszborn, 21 F.3d 62, 67-68 (5th Cir. 1994), the Fifth Circuit held that the Resolution Trust Corporation (“RTC”) as receiver of a failed bank was not a government actor. The RTC had sued the former officers and directors of the failed bank in a civil case and obtained a judgment including punitive damages. The government subsequently brought criminal charges against the officers and directors based on the same conduct. The officers and directors asserted Double Jeopardy as a defense. The Fifth Circuit found that the RTC as receiver stood in the shoes of the insolvent bank, i.e., that the RTC was a private entity and not the government for purposes of the Double Jeopardy clause. 21 F.3d at 68.
"Ms. Herron fails in her attempt to distinguish O’Melveny. She argues that FHFA should be treated differently than FDIC because FHFA acts as both regulator and conservator for Fannie Mae and FDIC only acts as conservator (or receiver). Ms. Herron overlooks critical facts. FDIC also serves as regulator of state-chartered banks that are not members of the federal reserve system.
"When one of these banks goes into conservatorship, FDIC serves as both regulator and conservator. Even with regard to federally
chartered institutions for which the Office of the Comptroller of the Currency has primary regulatory authority, such institutions must submit to FDIC regulation including FDIC “backup examination
authority.” Id. at 165.
"Similarly, Fannie Mae was not converted into a government entity when it was placed into conservatorship; instead, FHFA stepped into the shoes of Fannie Mae. FHFA as conservator for
Fannie Mae is not a government actor.
"Ms. Herron avers that Fannie Mae is a federal actor for the purpose of her First Amendment claim because: (1) the conservatorship is of indefinite duration; (2) FHFA presently
controls Fannie Mae; and (3) Treasury provides financial support to Fannie Mae in exchange for non-voting Senior Preferred Stock. Ms. Herron draws the wrong conclusion from these three
uncontested facts.
"Fannie Mae would be a federal actor if the FHFA conservatorship retained for the government permanent authority to appoint a majority of the corporation’s directors. Lebron, 513 U.S. at 400. To the contrary, the appointment of FHFA as conservator did not establish permanent government authority to control Fannie Mae.
First, Ms. Herron insists that there is no date certain when the conservatorship of Fannie Mae will end, and, therefore, she erroneously concludes that FHFA control over Fannie Mae
must be permanent.
"In order to be a government actor under the Lebron framework, permanent government control is required. Lebron itself distinguishes permanent from temporary control. The
Supreme Court contrasted Amtrak, which was a federal actor in the permanent control of the Ms. Herron unsuccessfully attempts to distinguish Beszborn, asserting that the RTC in that case operated to benefit the creditors and stockholders and asserting that FHFA operates Fannie Mae to benefit the federal government.
"This reflects an incorrect understanding of the facts. Treasury’s
interest in Fannie Mae is as a shareholder of Senior Preferred Stock. FHFA operates Fannie Mae to benefit of creditors and shareholders, in the same way that RTC operated the failed financial institution in Beszborn. 11 See Pl.’s Opp. [Dkt. 55] at 41 (“[T]he record evidence is undisputed that the conservatorship is of indefinite duration, and that neither FHFA nor Fannie Mae knows when or how it will end.”)
"Although the duration of the conservatorship is indefinite, FHFA’s control over Fannie Mae is temporary. Fannie Mae was not
a federal actor at the relevant time.
"Second, Ms. Herron asserts that FHFA’s complete control over Fannie Mae makes Fannie Mae a federal actor. Congress empowered FHFA to act as conservator of Fannie Mae for the
purpose of reorganizing, rehabilitating, or winding up its affairs. 12 U.S.C. § 4617(a)(2). Thus, the enabling statute expressly allows FHFA temporary but complete control over Fannie Mae, not
permanent control. See also Stip. ¶ 67 (citing Fannie Mae, Form 8-K filed with the SEC at 2 (Dec. 24, 2008) (conservatorship of Fannie Mae has no specified termination date)); Stip. ¶ 156 (citing
OMB, Fiscal Year 2012; Analytical Perspectives, Budget of the U.S. Government at 373 (Feb. 14, 2011) (budget reflects Fannie Mae as a non-budgetary entity in keeping with its temporary status in
conservatorship)); Stip ¶ 38 (quoting FHFA Fact Sheet: Questions and Answers on Conservatorship at 2 (Sept. 7, 2008) (there is no exact time frame that can be given as to when the conservatorship
of Fannie Mae might end)).
"The complete control exercised by FHFA is authorized by statute; it is how conservatorship is accomplished. Because conservatorship is by nature temporary, the government has not acceded to permanent control over the entity and Fannie Mae remains a private corporation.
"Finally, Ms. Herron also argues that Fannie Mae was transformed into a federal entity via (1) Treasury’s appointment of Fannie Mae as administrator of the Home Affordable Modification Program through the Financial Agency Agreement and (2) Treasury’s entry into the Stock Agreement with Fannie Mae. With regard to the Financial Agency Agreement, it states that Fannie Mae is
distinct from the government and must maintain a fiduciary duty of loyalty to the federal government. Stip. ¶ 146 (citing Financial Agency Agreement at 3-4). The Financial Agency Agreement also expressly provides that contractors to Fannie Mae (such as Ms. Herron) do not become subcontractors of the government. Stip. ¶ 147 (citing Financial Agency Agreement §14(B)).
"These provisions make it clear that the Financial Agency Agreement did not transform Fannie Mae into a government entity.
The Stock Agreement did not give the government permanent control over Fannie Mae. The Stock Agreement provided Treasury with a warrant to purchase 79.9% of the total shares of Fannie Mae common stock outstanding on the date of exercise at a nominal price. Stip. ¶ 93 (citing Fannie Mae Form 10-K for 2009 at 331-32 (Feb. 26, 2010)).
"As of this date, Treasury has not exercised this warrant. The Stock Agreement also required Treasury to provide funding to
Fannie Mae to ensure a positive net worth in exchange for shares of Senior Preferred Stock that pay a certain dividend. Stip. ¶ 55 (citing Treasury Fact Sheet: Treasury Senior Preferred Stock Purchase Agreements at 1-2 (Sept. 7, 2008)). Senior Preferred Stock conferred no voting rights. Id. Thus, Treasury’s warrant to purchase common stock and its ownership of non-voting Senior Preferred Stock do not give the United States permanent control over Fannie Mae and do not make Fannie Mae a government entity under Lebron.
"Ms. Herron also relies on Brentwood Academy v. Tennessee Secondary Sch. Athletic Ass’n, 531 U.S. 288 (2001), arguing that the government is so entwined with Fannie Mae as to have
created a public entity subject to constitutional restrictions. Under Brentwood, the Supreme Court held that an athletic association in which the majority of members were public schools could be deemed to be a federal actor because the association was pervasively entwined with government policies and was managed and controlled by government officials in their government capacity. Id. at 299-301. Brentwood did not change the law of conservatorship and receivership. As described above, a conservator or receiver steps into the shoes of the private entity — it assumes the private status of the entity. See O’Melveny, 512 U.S. at 86-87; Am. Nat’l Ins. Co., 642 F.3d at 1144;
Beszborn, 21 F.3d at 67-68.
"Fannie Mae was a private entity; when FHFA took over as conservator of Fannie Mae, it stepped into Fannie Mae’s private role. In sum, FHFA as conservator of Fannie Mae is not a government actor, and Ms. Herron’s Bivens claim will be dismissed."
Why the conservator CANNOT simply liquidate Fannie Mae
Hmmmm perhaps there are members of a merging entity accumulating commons. Someone likes those shares. 35 m worth
No pump and dump. Shake and bake. Get shook and you are baked! Get it?