Freddie Mac Settles Suit, Investors Get $410 Million

Law360, New York (April 21, 2006, 12:00 AM EDT) -- In one of the largest securities class action settlements in history, mortgage lender Freddie Mac will pay $410 million to end a shareholder lawsuit over accounting mistakes that led the company to restate earnings from 2000 to 2002.

The government-chartered agency estimates that the settlement will reduce first-quarter 2005 net income by about $220 million after tax, including the application of expected insurance proceeds.

Shareholders sued Freddie Mac after the company’s directors found that executives had manipulated accounting standards to reduce earnings volatility.

The Ohio Public...
To view the full article, register now.