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Fannie and Freddie Shares Rally After Judge Rules Against U.S.

The Street, By Dan Freed

Fannie Mae (FNMA) and Freddie Mac (FMCC) shares rallied Wednesday after a judge rejected the government’s attempt to delay a widely followed lawsuit brought by Fairholme Capital Management.

Fairholme is suing the government, arguing it unfairly changed the rules after it took control of both government sponsored enterprises during the 2008 financial crisis so that the government received all of the profits and left none for private shareholders. More than 20 lawsuits in all have been filed against the government by various Fannie and Freddie shareholders, including giant hedge funds such as Perry Capital and Pershing Square Capital Management.

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