The $75 billion Ohio Public Employees Retirement System and the $66.2 billion Ohio State Teachers’ Retirement System, both of Columbus, filed suit against the Federal Housing Finance Agency, conservator and regulator of Fannie Mae and Freddie Mac, according to a complaint filed in U.S. District Court in Washington.
The complaint asks Judge Richard J. Leon to throw out an agency rule that the systems allege is “designed to single out securities fraud victims and restrict their ability to recover their losses from Fannie Mae, regardless of the merits of their claims.”
The complaint states the rule, which took effect July 20, subordinates securities fraud claims to the lowest level of priority in receivership, on par with ordinary equity interests.
The two systems are lead plaintiffs in a separate federal suit filed in January 2005, also in U.S. District Court in Washington, against Fannie Mae alleging it committed securities fraud by issuing misleading financial statements and reports between 2001 and 2004.
Stefanie Johnson, spokeswoman for the FHFA, declined to comment.