Freddie Mac Sued For Not Disclosing Subprime Risks

Law360, New York (January 22, 2008, 12:00 AM EST) -- Government-chartered mortgage buyer Freddie Mac has been hit with a proposed class action securities lawsuit for allegedly misstating its involvement in the subprime mortgage crisis.

The complaint, filed Friday in the U.S. District Court for the Northern District of Ohio, accused Freddie Mac of artificially inflating the value of its stock by denying that it had any substantial investments in or exposure to the subprime financing of U.S. housing.

However, on Nov. 20, 2007, Freddie Mac revealed that $150 billion of its mortgage portfolio was riskier...
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