New York (HedgeCo.Net) – Hedge fund Perry Capital is suing the federal government for allegedly seizing the profits of mortgage finance giants Fannie Mae and Freddie Mac illegally, WSJ reports.
The lawsuit alleges that “The Treasury Department and the Federal Housing Finance Agency violated a 2008 law that placed Fannie and Freddie into conservatorship to prevent them from bankruptcy.”
The hedge fund is a stakeholder, according to Perry’s lawyers, although they haven’t disclosed just how many Fannie & Freddie shares they own.
“This lawsuit seeks to uphold the rule of law,” Theodore Olson, the lawyer representing Perry Capital, said. “If the government wanted to assume the powers of receivership, it could have chosen that course. Instead it chose conservatorship, and with the ‘sweep amendment,’ it overreached.”
Alex Akesson
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