There seems to be some confusion over a regulator's and conservator's responsibilities, especially as related to the succession clause in HERA. Perhaps this thumbnail may be useful.
1. A Regulator is appointed under law to serve the broad interests of the Public good. This is true regardless of the Agency, be it FDIC, SEC, FTC, FCC, FHFA. A Regulator has no responsibility to shareholders, fiduciary or otherwise. FHFA acting as Regulator has no mission to serve shareholder interests.
2. A Conservator is appointed under law to serve the narrow interests of the enterprise's survival. The life of the corpus is the primary and over-arching function of the Conservator. In this sense, the Conservator has the freedom to determine how actions may affect shareholders as part of the broader universe of enterprise stakeholders.
3. A Conservator acting as Receiver owes fiduciary responsibility to protect the assets of the enterprise in accordance with the hierarchical rights to assets as established under contract law. This is ranked by security rights pledged by collateralized assets, first line debtholders, Senior preferred shareholders, junior preferred shareholders, unsecured debtholders and, lastly, common shareholders.
Understanding this hierarchical stratification of responsibilities helps explain why FHFA has scant responsibility to the fate and plight of common share holders, "succession clause" provisions not withstanding. No Conservator acting under any law, not HERA alone, owes any fiduciary responsibility to common equity holders. This explains why common stock is almost always extinguished in most every receivership. Holding out some hope for relief in Fanniegate from any such argument is a Fool's Errand.
