I appreciate your reply and you gave me quite a bit to work through. Unfortunately, as on of my law professors used to say "that dog won't hunt."
1) AIG is not a precedent for FNMA.
- the Federal Reserve Bank issued AIG a LOAN under the authority of Section 13(3) of the Federal Reserve Act.
- The court in AIG held "illegal exaction," Specifically, Section 13(3) of the Federal Reserve Act did not authorize the federal reserve to take the warrant as collateral. Basically Congress did not give them that power.
- Since, it was an illegal exaction it could not be a 5th amendment taking. So the court never ruled on this.
FNMA SPSPA
- Authorization for the Treasury to purchase the warrants (a security as defined by statute) and the Senior Preferred Stock. 12 U.S.C. 1719 Sec 304 (g).
"Secretary of the Treasury is authorized to purchase any obligations and other securities issued by the corporation under any section of this Act, on such terms and conditions as the Secretary may determine and in such amounts as the Secretary may determine. "
- "other securities" - "The term “security” has the meaning ascribed to it by section 77b of title 15." - This includes Warrant.
- So Congress Specifically gave the Treasury the Right to purchase the SPS and Warrants. THUS, unlike AIG there was NO illegal Extraction.
- 5th amendment claim, AIG did not Rule. And, since "valuable consideration" I am not sure how this claim would hold up in court.
The Treasury said hey i would like to buy 100 Billion Dollars in Preferred Stock From you and a warrant for 79.9% of the company. In exchange i will give you 100 Billion Dollars, and agree to purchase 100 billion dollars of additional preferred stock at par value.
2) it is proven the government “cooked the books”
Great article, I believe it, i just don't know if it will ever be proven in court. Remember that FNMA "Agreed to" placing the company in conservatorship. Also, statute of limitations.
