- From LexisNexis® Mealey’s™ Daily Legal News.
Lead plaintiffs in a securities class action lawsuit against Fannie Mae and accounting firm KPMG LLP on May 7 asked a federal judge to approve a $ 153 million settlement that would end the lawsuit, which was brought in 2004 (In re: Fannie Mae Securities Litigation, No. 04-01639, D. D.C.).
Lead plaintiffs Ohio Republic Retirees System and State Teachers Retirement System of Ohio filed their motion for preliminary approval of the settlement in the U.S. District Court for the District of Columbia.
The lead plaintiffs originally filed the suit in 2004, naming Fannie Mae and three of its executive officers as defendants.
The lead plaintiffs alleged, on behalf of all purchasers of Fannie Mae’s common stock and call options and sellers of Fannie Mae’s put options from April 17, 2001, to December 22, 2004, that the defendants issued a series of false and misleading statements concealing the fact that Fannie Mae violated Financial Accounting Standard (FAS) 133 and intentionally manipulated its hedge transaction accounting to reflect misleading profits in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5.
The lead plaintiffs then amended their complaint to add KPMG as a defendant, and soon after, the District Court, in three separate rulings, dismissed each of the executives for failure to plead scienter.
The lead plaintiffs are represented by W.B. Markovits, Joseph T. Deters, James R. Cummins, Melanie S. Corwin, Christopher Stock and Francis P. Karam of Waite, Schneider, Bayless & Chesley in Cincinnati, Jeffrey Lerner of Bernstein Liebhard in New York and Daniel S. Sommers of Cohen Milstein Sellers & Toll in Washington.
Fannie Mae is represented by Jeffrey Kilduff, Robert Stern and Michael Walsh Jr. of O’Melveny & Myers in Washington.
KPMG is represented by Joseph Warin, Scott Fink, John Sturc, George Brown, Andrew Tulumello and David Debold of Gibson, Dunn & Crutcher in Washington.