Fannie, Freddie Takeover Likely To Spark Litigation

Law360, New York (September 8, 2008, 12:00 AM EDT) -- The U.S. government's seizure of mortgage giants Fannie Mae and Freddie Mac over the weekend is likely to spark a series of new lawsuits surrounding the troubled lenders and their now-former management, experts say.

“I think it's almost inevitable that there will be both derivative and securities class actions brought against every deep pocket you can imagine,” said John Coffee, a securities law professor at Columbia Law School.

On Sunday, Treasury Secretary Henry Paulson revealed that the federal government would take over both of the government-sponsored...
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