Ohio Retirement Fund Sues Freddie Mac
- Jan 24, 2008
Youngstown, Ohio–The Ohio Public Employees Retirement System filed a lawsuit Friday alleging government-backed mortgage financer Freddie Mac downplayed its subprime investments, costing the Ohio pension system up to $27 million, the Columbus Dispatch reports.Attorney General Marc Dann said the Federal Home Loan Mortgage Corp. “secretly and intentionally participated in one of the largest housing investment deceptions in modern U.S. economic times.”The lawsuit, filed in federal court in Youngstown, Ohio, claims Freddie Mac concealed its subprime lender investments before its stock plummeted in November after news broke that Freddie Mac had lost $2 billion in the third quarter due mostly to the subprime market collapse.Dann’s office named the Ohio Public Employees Retirement System, which represents nearly 900,000 current and retired government employees and their beneficiaries, as the lead plaintiff in the case. In a press release, Dann said he feels mortgage lenders need to be held accountable for their part in the subprime market breakdown.”By authorizing me to bring this suit on their behalf [state pension officials] are protecting the interests of the pension plan, the workers and retirees who depend upon it and the taxpayers whose hard-earned dollars fund it,” Dann said. “And they are also sending a loud and clear message to Wall Street that this type of fraud and manipulation will not be tolerated by the people … that are being devastated by what Freddie Mac has done.”Freddie Mac spokeswoman Sharon J. McHale declined to comment, saying the company does not comment on pending litigation.The case could become a benchmark lawsuit for other public pension plans that saw large subprime-related losses, according to the Dispatch.