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Financial Services & E-Commerce

Freddie & Fannie Shareholder Litigation Update

Litigation Practice Group Teleforum Thursday, March 02, 02:00 PMFederalist Society Teleforum Conference Call

During the 2008 financial crisis, Congress provided Fannie Mae and Freddie Mac with billions of dollars in emergency funds to keep them afloat, supplemented by the investments of private investors who bet that these entities would return to profitability. In 2012, just as Fannie and Freddie were indeed becoming profitable again, the Government instituted a "net worth sweep" that required them to remit to the government nearly all of their profits every quarter. Fannie and Freddie have paid the government over $246 billion so far. In the process, the stock was rendered virtually worthless. Investors filed myriad lawsuits as the net worth sweep came into effect. After four years of litigation and an initial dismissal by the district court, the D.C. Circuit has now largely affirmed but also sent key contract-based claims for monetary relief back to the district court for further review. This Teleforum discusses this historic litigation, its implications for the housing market and the proper role of the Government, and the investors' prospects for success on their claims.

Featuring:

  • John Carney, Editor, Breitbart News
  • Jason A. Levine, Litigation Partner, Vinson & Elkins LLP 

Litigation Update: American Bankers Association and Washington Federal v. U.S. - Podcast

Litigation Practice Group Podcast
Stephen J. Obermeier, Brett A. Shumate February 21, 2017

The American Bankers Association and Washington Federal, a bank holding company, have filed a suit against the United States government for reducing the amount of dividends paid to banks that own Federal Reserve stock. In the Federal Reserve Act of 1913, the Federal Reserve agreed to pay 6% annual dividends to stockholders of regional Federal Reserve Banks, but Congress decreased that amount to 2% in 2015 in the Fixing America’s Surface Transportation Act, or FAST Act, which appropriated the other 4% of would-be-dividends for highway funding. Proponents of the change argue that 6% dividends were exorbitant returns for the stock, and that banks are still guaranteed a positive return, even at 2%.

Brett Shumate and Steve Obermeier of Wiley Rein, who represent the plantiffs in this case, joined us to discuss the pending litigation.

Featuring:

  • Stephen J. Obermeier, Partner, Wiley Rein LLP
  • Brett A. Shumate, Partner, Wiley Rein LLP

Reframing Financial Regulation: Enhancing Stability and Protecting Consumers - Podcast

Financial Services & E-Commerce Practice Group Podcast
Hester Peirce January 27, 2017

Reframing Financial Regulation: Enhancing Stability and Protecting Consumers, edited by Hester Peirce and Benjamin Klutsey, brings together a diverse set of authors to provide alternative ways to regulate different aspects of the financial system. The chapters embody approaches that rely less on centralized, top-down regulations and more on market discipline and oversight. The recently published book, which reflects a wide variety of viewpoints and approaches, seeks to initiate a lively conversation about how a thoughtfully regulated, market-based financial system can facilitate risk sharing, efficiently provide access to capital, and enable households to save for the future. Senior Research Fellow and the Director of the Financial Markets Working Group at the Mercatus Center at George Mason University, Hester Peirce, joined us to discuss this new book.  

Featuring:

  • Hester Pierce, Senior Research Fellow and the Director of the Financial Markets Working Group at the Mercatus Center