Freddie Mac faces lawsuits from four pension funds, all claiming the mortgage buyer's failure to follow proper accounting procedures cost them millions of dollars.
Ohio Attorney General Jim Petro today filed suit in U.S. District Court in Cincinnati on behalf of the $52 billion Ohio Public Employees' Retirement System and the $42.4 billion Ohio State Teachers' Retirement System, both of Columbus. Mr. Petro said he intends to seek lead plaintiff status for the two funds, based on "the enormity of the retirement systems' losses," which he said total $25 million. Also today, the $18 billion Teamsters Central States, Southeast & Southwest Pension Fund, Rosemont, Ill., and the $3.8 billion West Virginia Investment Management Board, Charleston, announced they are filing class-action lawsuits in U.S. District Court in New York against Freddie Mac for the same reasons. Officials at the West Virginia fund said it lost $1.7 million on its Freddie Mac investment.
Sharon McHale, Freddie Mac spokeswoman, said she could not comment on the lawsuits, but she referred to the company's internal investigation and acknowledgement of the accounting problems as proof that the agency is addressing investors' concerns.