Court Decision Sends Fannie Mae, Freddie Mac Shares Plummeting
A federal appeals court ruled Tuesday that hedge funds cannot sue the U.S. government for seizing Fannie Mae and Freddie Mac profits.
Ever since Fannie and Freddie received a $187.5B bailout during the housing crisis they have been under the guardianship of the Federal Housing Finance Agency, and shareholders argued the government’s seizure of profits from the two companies is illegal, Business Insider reports. The court’s decision pushed the shares of each firm down over 30%. Recently confirmed Treasury Secretary Steven Mnunchin plans to to revive talks of privatizing Fannie Mae and Freddie Mac, saying it is on his top 10 to-do list.
On Friday Fannie Mae announced it would pay $5.5B in dividends to the U.S. Treasury, pushing up the total it has paid to the government to $160B.