{"id":5352,"date":"2012-08-25T00:00:00","date_gmt":"2012-08-25T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2012\/08\/exfannie_mae_executives_have_t"},"modified":"2022-04-28T15:46:39","modified_gmt":"2022-04-28T20:46:39","slug":"exfannie-mae-executives-have-t","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/exfannie-mae-executives-have-t\/","title":{"rendered":"Ex-Fannie Mae Executives Have to Defend Against SEC Lawsuit Over Their Alleged Involvement in Understating Mortgage Company\u2019s Exposure Risk"},"content":{"rendered":"<p>The U.S. District Court for the Southern District of New York has decided that ex-Federal National Mortgage Association executives do have to contend with a Securities Exchange Commission enforcement lawsuit over their alleged role in underplaying just how exposed the company was to high risk loans. Ex-Fannie Mae (FNM) CEO Daniel Mudd, former single family mortgage business EVP Thomas Lund, and ex-chief risk officer Enrico Dallavecchia had sought to have the lawsuit dismissed because they said that the Commission failed to make its case against them. Judge Paul Crotty has denied their motion.<\/p>\n<p>The SEC claims that former Fannie Mae executives misled investors about the actual degree to which the company was exposed to \u201cAlt-A\u201d loans and subprime loans when they failed to reveal this information in the mortgage firm\u2019s public disclosures. As a result, Fannie Mae understated its mortgage exposure risk by hundreds of billions of dollars.<\/p>\n<p>The defendants had countered that because Fannie Mae is an independent establishment of this country, per the 1934 Securities Exchange Act\u2019s Section 3(c), government agencies are protected from liability. Crotty, however, did not agree Fannie Mae did not fall under the \u201cindependent establishment\u201d category seeing that it is a private corporation, run by a board, did not get federal funding, and traded stock in public.<\/p>\n<div class=\"read_more_link\"><a href=\"https:\/\/www.investorlawyers.com\/blog\/exfannie-mae-executives-have-t\/\"  title=\"Continue Reading Ex-Fannie Mae Executives Have to Defend Against SEC Lawsuit Over Their Alleged Involvement in Understating Mortgage Company\u2019s Exposure Risk\" class=\"more-link\">Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. District Court for the Southern District of New York has decided that ex-Federal National Mortgage Association executives do have to contend with a Securities Exchange Commission enforcement lawsuit over their alleged role in underplaying just how exposed the company was to high risk loans. Ex-Fannie Mae (FNM) CEO Daniel Mudd, former single family [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[4031,3864],"tags":[],"class_list":["post-5352","post","type-post","status-publish","format-standard","hentry","category-subprime-loans","category-subprime-mortgage"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Ex-Fannie Mae Executives Have to Defend Against SEC Lawsuit Over Their Alleged Involvement in Understating Mortgage Company\u2019s Exposure Risk &#8212; Investor Lawyers Blog &#8212; August 25, 2012<\/title>\n<meta name=\"description\" content=\"The U.S. District Court for the Southern District of New York has decided that ex-Federal National Mortgage Association executives do have to contend with &#8212; August 25, 2012\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/exfannie-mae-executives-have-t\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Ex-Fannie Mae Executives Have to Defend Against SEC Lawsuit Over Their Alleged Involvement in Understating Mortgage Company\u2019s Exposure Risk &#8212; Investor Lawyers Blog &#8212; August 25, 2012\" \/>\n<meta name=\"twitter:description\" content=\"The U.S. District Court for the Southern District of New York has decided that ex-Federal National Mortgage Association executives do have to contend with &#8212; August 25, 2012\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Shepherd Smith Edwards &amp; Kantas, LLP\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Ex-Fannie Mae Executives Have to Defend Against SEC Lawsuit Over Their Alleged Involvement in Understating Mortgage Company\u2019s Exposure Risk &#8212; 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