Fannie Mae-No Politics (FNMA)

[IL Padrino]

why is exercising the warrants not legal?

For a few reasons.
1. The government is not legally allowed to invest in the stock market. If they were, there is no limit to what they can do to private companies and the stock market in general.

2. The whole situation surrounding the GSEs was a farce to begin with. This is easily proven through discovery.

3. They got the warrants for $.0001 or something ridiculous like that. Doesn’t seem ethical they can dilute us on the open market at value.

4. Reckusdo has given a better reason which I can’t remember. Maybe he can elaborate if he reads this.


Link to good legal argument for point 1.

http://www.aei.org/publication/government-investing-in-the-stock-market/