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Volume 14 - Number 17

August 22, 2014

New Suit By Common GSE Investors Seeks Injunction of Profit Sweep

Pershing Square Capital Management – reportedly the largest investor in Fannie Mae and Freddie Mac common shares – filed two separate lawsuits last week demanding the federal government cease and desist its “net worth sweep” of GSE profits. The New York hedge fund contends that the government’s action not only illegally shortchanges investors of the GSEs’ common, it also amounts to a de facto liquidation of the two firms, according to its first complaint filed with the U.S. Court of Claims in Washington. The first complaint lists the U.S. as a defendant, as well as Fannie and Freddie as nominal defendants.

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After the November elections, how long will it take for a new Congress and White House to pass GSE reform legislation?

I’m confident a bill will be passed the first year.


2 to 3 years. GSE reform is complicated.


Sadly it won’t happen in a Clinton or Trump first term.


Not in my lifetime.


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