Fannie Mae Says Investors Can't Prove Fraud

Law360, New York (August 23, 2011, 3:47 PM EDT) -- Fannie Mae, its former brass and auditor KPMG LLP on Monday told the Washington federal judge overseeing multidistrict securities litigation that shareholders failed to show that the mortgage giant's accounting for hedge transactions caused losses in an alleged $12 billion accounting fraud.

Filing a flurry of motions, the defendants said that the plaintiffs’ expert Gregg Jarrell effectively disproved their fraud claims, laying bare the fact that investors cannot show that the allegedly false financial statements caused their losses.

“Because Professor Jarrell fails to show both that...
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