Legal Times:
Plaintiffs’ firm Coughlin Stoia Geller Rudman & Robbins hasn’t wasted any time taking action in the wake of the Fannie and Freddie bailout.
Partners Samuel Rudman and David Rosenfeld filed a securities class action in the U.S. District Court in the Southern District of New York yesterday on behalf of those who held publicly traded securities of Fannie Mae between November 16, 2007 and last Friday, before the federal government took over the company.
Defendants in the suit are Stephen Ashley, chairman of Fannie’s board; Daniel Mudd, Fannie’s president and chief executive officer; Stephen Swad, Fannie’s ex-chief financial officer; and Robert Levin, formerly the company’s executive vice president and chief business officer.
The complaint alleges that Fannie’s publicly disclosed financial results misrepresented the financial health of the company, and that the defendants either made false statements or failed to disclose the truth to investors. As a result, says the complaint, the defendants’ “fraudulent scheme” was successful in deceiving the public, artificially inflating the prices of publicly traded Fannie Mae stock, and causing class members to buy Fannie stock at those inflated prices.
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