"The warrants served as a means to help recoup money invested within the companies, not as an open option to expropriate hundreds of billions of dollars long after the loan has been repaid."
Please post a link to the portion of the original contract that stated that the warrants were for this purpose only. As with all contracts, the hidden "meaning" of the contract is not important. Only what is within the 4 corners of the document. Unless a limitation on the warrants' use is stated within the contract, it can be used for any purpose. The warrants do serve as an option contract of sorts...in the sense that the warrants don't have any value until they are exercised, much like an option. I'm not saying they are equal, but they do have similar outcomes.
"The warrants at the onset of the conservatorship were not unconstitutional"
Arguable, for sure...but I tend to agree.
"however given the present circumstances and the fact that the US Treasury has been made whole plus 70 billion, the execution of them now would certainly fall into the category of an unconstitutional taking."
As I said previously though some may make this argument, I consider it a failed battle before it starts. The warrants are, for all intensive purposes, the property of the US Government. They were issued thru a legally binding contract set up by a legally appointed Conservator. For the Government to exercise the warrants would not be taking away anyones private property...it would be utilizing the private option that it already possesses. It is quite literally impossible to comprehend that the issuance of the warrants would be constitutional but the exercise of them would be unconstitutional. If you cant exercise them, they are meaningless from the onset. As for arguments that the dilution of the stock is a form of taking, this is a failed argument as well. Corporations issue new stock all the time. It is a common and legal business practice. Just because this issuance of new stock comes in the form of a warrant does not change the law. Now...if in the charter, certain stock classes are provided an assurance of first bid on new stock issuance, then I could see that as a possible taking, or at least a breach of contract...but without that, the claim of taking is just impossible to uphold.
"The courts regarding this matter would look towards legal precedent to determine what should be considered a reasonable expectation on return of investment."
This is a false statement. A court would never determine what a reasonable return of investment is. First of all, investment is never guaranteed. Second of all, in all contract law, a contract only requires adequate compensation, not reasonable compensation. Adequate compensation is defined as a peppercorn...meaning if it has at least some actual comprehensible value, then the contract is valid. I would love to see a single case in all of history where the court ruled along the lines that because a party didn't get a reasonable return on their investment, that they should win some sort of damages. I don't believe such a case exists.
"FDIC conservatorships, which HERA conservatorship provisions were directly modeled after, will provide the necessary legal procedural history."
Well, the validity of the Conservatorship is a separate issue than the issue of a taking. I do believe the validity of the Conservatorship is open to fight...at least as long as the statute of limitations don't expire.
"Please show me anywhere in the history of conservatorships where the conservator was allowed to expropriate 100’s of billions of dollars from the companies and shareholders under conservatorship. Please show me anywhere in the history of conservatorships where a conservator conducted itself in the manner that FHFA has with utter negligence and disregard in their fiduciary duties to protect and conserve the assets of the companies under conservatorship."
First of all, I think its safe to say that the Conservatorship of the GSEs is unprecedented. That is to say, there is no law that quite fits the situation we are in. Therefore, precedent will not be very helpful. Second of all, this is an issue of the NWS, not one of the Warrants. The Warrants are not a form of expropriation in any legal definition of the word. That being said, I fully agree that the NWS was a clear breach of contract and beyond the Conservators purview. That is why I hold stock...because of that belief.
Market Data 
Markets 
AI
