Boston, MA 08/15/2014 (wallstreetpr) – Pershing Square Capital Management LP headed by Bill Ackman has decided to sue the U.S. government over the revised terms of the bailout of Federal Home Loan Mortgage Corp (OTCBB:FMCC) and Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) that took place in 2008.
Insights of this issue:
According to reports, there was a complained filed in U.S. Court of Federal Claims in Washington on August 14, 2014, which stated that the Federal Housing Finance Agency agreed to strip complete profit from the companies. FHFA acted as a conservator of FNMA and FMCC. Taxpayers of the country rescued both FNMA and Federal Home Loan Mortgage Corp (OTCBB:FMCC) with a bailout that amounted to $187.5 billion. Although US firms have sent more amount than $187.5 billion to the treasury, but it was considered as a return on investment rather than a full repayment of the aid.
Pain of the investors:
Although the matter seems quite clear, but all the investors are in big trouble. The main reason behind their trouble is but the issue that treasury department decided to keep the entire profit of the companies.
The lawsuit filed by Pershing Square Capital Management LP is the 20th time (at least) when the firm has challenged the decision of US government to divert the profit of FMCC and Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) to the treasury department. The owner of Pershing Square thinks that US government has not done anything right. Billionaire Ackman, age 48, seeks everything from government starting from disgorgement, damages, and restitution for the illegal action taken by the government to grab someone else’s property.
The report filed by the hedge fund pointed out that the conduct of the government violated the authority of FHFA and obligations to conserve FNMA and the assets of Federal Home Loan Mortgage Corp (OTCBB:FMCC). A final decision has not yet come out, and all the investors will look forward to seeing the court’s decision in this issue.