Different Day, Same Confusion

When we blogged yesterday about the confusion surrounding a couple of lawsuits against the U.S. Department of Treasury, we wondered how far the confusion would spread. We got our answer pretty quickly when we came across a Wall Street Journal article. Headlined “U.S. Government Puts Points on Board in Fannie Fight,” WSJ does pretty much the same thing that HousingWire initially did. The Wall Street Journal lives behind a paywall, suffice to say that the case before U.S. District Court Judge Amy Berman Jackson bears little resemblance to the shareholder suits against the GSEs and Treasury.

A WSJ reader going by the screen name “gary e” quickly posted a comment to the WSJ article that succinctly explains why the two cases are different and why there is no precedent being set:

The other lawsuits are based on 5th amendment rights under the constitution, not based on shareholder derivative lawsuit where the plaintiff takes the roll of Fannie Mae because Fannie Mae cant [sic] defend itself. HERA says the conservator can do that only. Fairholme, Perry and Pershing have all said that both the FHFA and treasury have taken the PROPERTY of shareholders. The case your [sic] writing about has nothing to do with the taking of property for which HERA cannot defend. HERA is not the 5th amendment to the constitution, Nor is HERA the law the supersedes all other laws.

Fact is, the shareholder lawsuits remain strong. And we’ll leave readers with a bit from Tim Pagliara’s note to the WSJ editors today in response to the article:

“The author needs to get a law degree if he is going to take on legal issues as a writer for the WSJ.  The parallels that he draws between Judge Amy Berman Jackson’s case and the Fairholme, Pershing, Perry Capital lawsuits have all the sophistication of an arm chair quarterback trying to tell Peyton Manning how to do a cover 2 read. I expect more substance and accuracy out of the Wall Street Journal…”

We hope this is last time we’ll have to clear up the confusion surrounding this, but we won’t hold our breath on that. 

*We have been made aware, although it is not evident in his writing, the author of the WSJ article, John Carney, does hold a law degree.