Freddie Mac Must Face Subprime Deceit Suit, 6th Circ. Says

Law360, New York (July 20, 2016, 6:35 PM EDT) -- The Sixth Circuit revived a proposed shareholder class action accusing Freddie Mac of lying about its exposure to subprime mortgages in the lead-up to the financial crisis, saying on Wednesday the mortgage giant could be liable for a stock drop.

A three-judge panel found that Ohio Public Employees Retirement System had a valid theory of how the alleged deceptions caused Freddie Mac share prices to fall after its subprime exposure came to light. The appellate judges reversed an Ohio federal judge's 2014 dismissing the case for a failure to connect the alleged misrepresentations to the stock drop — a requirement known...

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