Replies to post #175814 on Fannie Mae-No Politics (FNMA)

[955]

Fraud conviction, punitive damage award, 3x value $174 FNMA. Is this just a dream???

There is serious discussion now on whether or not, since this was not disclosed to investors if in fact Treasury committed securities fraud.

Just a few weeks before the financial collapse, Hank Paulson said the GSE's were safe and sound!!!

http://www.nationalreview.com/corner/371319/did-fannie-and-freddie-bailout-involve-securities-fraud-jillian-kay-melchior

[obiterdictum]

This article has factual errors relating to the motions of dismissal and discovery and needs a corrective review using the rules of civil legal procedures of the US District Court and the US Court of Federal Claims.

See below for reference.

Federal Rules Of Civil Procedure For The United States District Courts
http://www.federalrulesofcivilprocedure.com/rules/

Current Rules of the Court of Federal Claims
http://www.uscfc.uscourts.gov/sites/default/files/court_info/20130813_rules/13.08.30%20Final%20Version%20of%20Rules.pdf

For example, the following statements need careful consideration

1. Treasury/FHFA cannot allow discovery

If so ordered by the Court, how will the Treasury and the FHFA not allow discovery?

2. Discovery will reach to ALL communications with everyone involved with the decision.

ALL communications are not available on account of privilege (privileged communications) and there are limits on the number of people that can reasonably and legally participate in interrogatories as well as the amount of time allotted to complete depositions per person and the duration to completion of the discovery process.

3. Their entire case rests on their claim that FHFA acted alone, as Federal National Mortgage Assctn Fannie Mae (OTCBB:FNMA) ‘s regulator in enacting the Net Worth Sweep.

That is not the argument made by the US Treasury or the FHFA. It is clear that there was and still is interaction between these two agencies. The issue argued is that the FHFA was not acting as the US Government but as the GSEs as corporations.

We explain in our motion that, based on well-established case law, FHFA stepped into
the shoes of the Enterprises when it assumed the role of conservator under Section
4617(b)(2)(A) of HERA. See US Mot. to Dismiss at 13-14; Herron v. Fannie Mae, 857 F.
Supp. 2d 87, 96 (D.D.C. 2012) (holding that “FHFA as conservator of Fannie Mae is not a
government actor”). Thus, FHFA is not the United States for the purposes of this Court’s
jurisdiction. See O’Melveny & Myers v. Fed. Deposit Ins. Corp., 512 U.S. 79, 85 (1994) (FDIC
acting as receiver “is not the United States”); Ameristar Fin. Servicing Co. LLC v. United States,
75 Fed. Cl. 807, 812 (2007) (dismissing claim because the FDIC as conservator “was not acting
as the United States”).

Page 9 - http://www.valueplays.net/wp-content/uploads/Govt-Response-to-Discovery-Motion.pdf

4. Rather than risk messy and potentially embarrassing discovery/trial to their agencies in this case, they can instead take a victory lap by setting aside the Net Worth Sweep amendment. How? Simple. At the end of Q1 Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Fresenius SE & Co KGaA (FRA:FRE) will have most likely completely paid off the US Gov’t’s investment in them. Obama/Lew/Watt can claim success in the bailout repayment, still hold 80% of the common giving the gov’t future profits from their involvement and end this case by setting aside the Net Worth Sweep and the dozens of additional lawsuits discovery will inevitably spawn. Once the NWS amendment is set aside, the basis for the suits against them now evaporates.

The US Treasury and FHFA have already filed motions to dismiss the Plaintiffs cases based on already executed actions from 2008 to 2010. Will the Plaintiffs and Court allow the US Treasury and FHFA to arbitrarily alter material evidence and alleged illegal procedural and and unlawful actions and Constitutional violations presented in the Plaintiff's complaint during pre-trial hearings?

And so on. It is perhaps better to consider this analysis to be more positive thinking than an authoritative legal precis of what is happening and can happen in the future.

The Plaintiffs in the US District Court have solid injunctive cases based on violations of procedural (APA) and statutory law (HERA 2008) that will be very difficult for the defendants to defeat. The Plaintiffs in the US Court of Federal Claims will have to make careful, detailed arguments to do to overcome existing Supreme Court case law precedents regarding their 5th Amendment takings and due process claims cases.