Ohio pension fund sues Freddie Mac for fraud
An Ohio pension fund filedan investor class action lawsuit against Freddie Mac, accusingthe mortgage finance giant of securities fraud for failing todisclose risks from its investments in the subprime mortgagemarket. Ohio Attorney General Marc Dan, who filed the suit in U.S.District Court, the Northern District of Ohio, on Tuesday saidFreddie Mac had “secretly and intentionally participated in oneof the largest housing investment deceptions in modern U.S.economic times.” According to Dann, the Ohio Public Employees RetirementSystem suffered losses of up to $27.2 million as a result ofthe fraud. Attorney General Marc Dann said in a statement the companyimproperly bought risky home loans that fell sharply in valueand led to huge losses for Freddie Mac. Dann said Freddie Mac, a private company that holds afederal charter, was “deeply invested in the subprime mortgageindustry and failed to disclose that it was not protectingitself from the billion-dollar risks it incurred.” A spokesman for Freddie Mac declined to comment. The suit was filed on behalf of the Ohio Public EmployeesRetirement System and all other purchasers of Freddie Mac stockbetween Aug. 1, 2006, and Nov. 23, 2007. The pension fund isseeking to be the lead plaintiff in the class action suit.