A U.S. District Court judge dismissed a class-action lawsuit filed by two pension plans against Freddie Mac, accusing it of allegedly deceiving investors about the risk of subprime mortgages.
Judge John Keenan in U.S. District Court in New York on Wednesday granted a motion by the Federal Home Loan Mortgage Corp. to dismiss all claims in the case filed against the company and certain of its former senior officers, according to a Freddie Mac statement issued Friday.
The suit was filed in August 2008 by the $19 billion Teamsters Central States, Southeast and Southwest Areas Pension Fund and $5 billion National Elevator Industry Pension Plan.
“Judge Keenan found not actionable all alleged misstatements and omissions regarding Freddie Mac's involvement in the subprime and Alt-A mortgage markets, holding that plaintiffs failed adequately to plead that Freddie Mac's disclosures on those issues were either false or misleading,” the statement said.
“The judge also dismissed alleged misrepresentation claims relating to Freddie Mac's capital adequacy, core capital, internal controls and underwriting processes.”
Louis P. Malone III, partner with the law firm O'Donoghue & O'Donoghue, general counsel for the National Elevator plan, Newtown Square, Pa., said, “Our intention is to amend the complaint” to continue the case.
Mark Angerame, CFO of the Central States fund, Rosemont, Ill., couldn’t be reached for comment.
The court granted the plaintiffs 60 days to file an amended complaint, if they choose to do so, according to the Freddie Mac statement.