Administration September 4, 2007

Freddie Mac to Settle Securities Suit for $410M

April 21, 2006 (PLANSPONSOR.com) - The Federal Home Mortgage Co. (Freddie Mac) has agreed to pay $410 million to settle a class-action securities lawsuit involving two Ohio pension systems, according to news reports.
Reported by

Ohio Attorney General Jim Petro filed the suit in 2003, seeking damages related to losses suffered in the State Teachers Retirement System (STRS) and Public Employees’ Retirement System (PERS) as a result of accounting issues and a subsequent management shakeup at Freddie Mac (See Freddie Mac Under Pension Fund Lawsuit Fire ). Petro said the company’s former executive team knowingly misled the public with an “overly” vague disclosure of information and allowed lower level managers to make financial decisions even though they didn’t have the proper skills and information. 

“We have sent an important message to companies who receive money from investors – we will protect our citizens’ savings with tenacity,” Petro said in a statement, according to Business First of Columbus.

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