Recent Updates from the Investors Unite Blog
With Great Power Comes Great Responsibility
Friday, October 17th, 2014
With Great Power Comes Great Responsibility
Recently, the Fairholme Fund attorneys hired a gentleman named Tim Howard to assist with their case. Mr. Howard is eminently qualified to help sift through the 800,000 pages expected to be produced during the discovery phase because he served as the CFO of Fannie Mae. The government’s reasoning for this is pretty flimsy – in our completely non-legal opinion – and yet, U.S. Judge Margaret Sweeney went along with it. Basically, Howard was the subject of investor lawsuits in which the government presumably provided for his defense. It is critical to mention that all of the suits were found to be without merit.
From Seeking Alpha:
“Yesterday, Judge Sweeney issued a ruling that said she would not allow Tim Howard, the former CFO of Fannie Mae, to participate in the discovery process. Judge Sweeney essentially agreed with the government that the risks involved outweighed the benefits and that having Tim Howard involved could have a ‘destabilizing effect on the nation’s housing market and economy.’”
There’s also this from Housing Wire:
“Government attorneys opposed Fairholme’s move to bring Howard on as an expert to view discovery, which is covered under a protective order. They argued that Howard’s knowledge and bias would cause ‘damage to the economy.’
Howard was hired by Fairholme Funds in their lawsuit against the U.S. Treasury.
Back in August, U.S. Judge Margaret Sweeney handed Fairholme Funds a huge victory when she ruled in favor of broad access in discovery to FHFA records going back years, rather than the narrow period in 2012 that the FHFA wanted to limit discovery to.
This opened up, on a limited basis, more than 800,000 documents to discovery.
Investors Unite Executive Director Tim Pagliara found the government’s excuses to be … fishy. Here’s the statement that he issued regarding this turn of events:
“The government has consistently opposed discovery of Treasury documents as being ‘dangerous’ to the economy, and has fought to keep them out of the public eye. Now it is opposing a qualified expert to view these documents over charges of ‘bias,’ even though he’s been out of the company for 10 years. Clearly, they’re hiding something, and that’s going to come out. “
A number of other publications weighed in on this as well. Two are behind paywalls but some of our readers may have access:
Todd Sullivan’s ValuePlays: Breaking: Time Howard’s Access Denied
PoliticoPro: Judge Denies Former Fannie Exec Access to Docs
ValueWalk: Fannie Mae Privileged Info Could Threaten Financial Markets: Sweeney
We’ve never met Mr. Howard, but we imagine him to be a smart, pleasant, sharp individual. We suppose he has no idea of the great power he wields over the entire U.S. economy. We imagine he may have though such power to affect the country through reading and explaining documents was contained in offices that have an unusual shape, such as Oval. One hopes that Mr. Howard wields such power judicially.
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Real Reform for Fannie & Freddie
Current legislation needs to be amended in order for all investors – pensioners, community banks and individuals – to be repaid and create a solid platform for the mortgage market to thrive.
- Repayment of Pensioners, Community Banks and Individuals invested in Fannie and Freddie.
- Stricter lending standards and oversight of Fannie and Freddie.
- Affordable housing goals reinstated and upheld under stricter oversight.
Click here for more information
Investors Unite works to educate Fannie Mae and Freddie Mac shareholders and lawmakers of the importance of reforming the GSEs in a way that will reimburse shareholders what they are contractually and legally owed, but have not been paid.
The United States Congress is considering Government Sponsored Enterprise (GSE) reform that would wipe out Fannie Mae and Freddie Mac shareholders for good. These shareholders include everyday Americans such as public service retirees, teachers, firefighters and police officers. These individuals and pension funds invested in the GSEs before, during, and after the conservatorship and should be made whole under any reform. Taxpayers have been repaid with interest for their 2008 bailout of the GSEs.
Our country’s respect for the rule of law demands that private property rights be protected and Investors Unite gives Fannie Mae and Freddie Mac shareholders a voice in that fight.