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Fannie and Freddie investors lose suit

Govt allowed to take all profits of the bailed-out mortgage giants: judge

Published Wed, Oct 1, 2014 · 09:50 PM
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[DETROIT] Fannie Mae and Freddie Mac investors lost their legal challenges to a change to the mortgage giants' 2008 bailouts that sent their profits to the US Treasury.

The lawsuits, among the first of almost 20 related cases to be decided, were filed by investors including Bruce Berkowitz, the head of Fairholme Capital Management, who was named Morningstar's domestic stock manager of the decade for the 2000s, and billionaire hedge fund manager Richard Perry's Perry Capital.

The investors sued for breach of contract over allegedly promised dividends and liquidation preferences, and what they called an illegal "taking" under the US Constitution.

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