Corporate & Securities Law

Fannie Mae, Freddie Mac Preferred Stock Loss Recovery

By Steven Caruso

Investment losses in Fannie Mae and Freddie Mac preferred stock have created devastating financial issues for investors throughout the country. Many of these individuals were sold shares of Fannie Mae and Freddie Mac through brokerages or financial institutions that, in turn, misrepresented the investments, telling clients that the stock was guaranteed or implicitly guaranteed by the federal government.

As we now know, those characterizations were false and misleading. Moreover, many clients never knew the dire financial problems facing the two mortgage giants. On Sept. 6, Fannie Mae and Freddie Mac were seized by the federal government and placed into conservatorship in a deal through which the Treasury Department bought senior preferred shares issued by the two companies. In turn, billions of dollars in equity for holders of Fannie Mae and Freddie Mac?s common and preferred stock were essentially wiped out.

Certain investors may have a viable claim to recover some of their investment losses in Fannie Mae and Freddie Mac preferred stocks. If you?ve suffered preferred stock losses in Fannie Mae or Freddie Mac, we want to hear your story. Leave a message in the Comment Box below or via the Contact Us form.

Full post as published by Representing Investors on November 30, 2009 (boomark / email).