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Fannie and Freddie Investors Play it Safe After AIG Ruling

By Xehvrije West

Fannie Mae and Freddie Mac investors made some careful moves after Monday’s court decision between American International Group (AIG) and the GSEs. The share of the GSE’s stock went up about 9 percent before dropping back down, however, Monday’s ruling may not necessarily mean good news for shareholders, according to multiple media reports.

MarketWatch analysts said that Judge Thomas C. Wheeler of the U.S. Court of Federal Claims ruled that the U.S. government ran afoul of the law when rescuing American International Group in 2008. The judge found that “there is nothing in the Federal Reserve Act or in any other federal statute that would permit a Federal Reserve Bank to take over a private corporation and run its business as if the government were the owner.”

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