Hedge funds largely failed in their legal challenge to the U.S. government’s capture of billions of dollars in profits generated by Fannie Mae and Freddie Mac after their bailout, sending shares of the mortgage guarantors plunging.
Perry Capital LLC, the Fairholme Funds and other big investors lost a bid to overturn a judge’s ruling that said they can’t sue the government over the dividend change. The change known as the “net-worth sweep” forced the companies to send almost all their profits to the U.S. Treasury, leaving shareholders with nothing. The companies have been under government control since being bailed out during the 2008 financial crisis.
The funds may still be able to pursue some contract-based claims.
With a ruling Tuesday, the U.S. Supreme Court revived a long-running whistleblower lawsuit that accused Wachovia’s investment bank of violating accounting rules and skirting internal controls to pursue short-term profits.
The Supreme Court vacated a judgment in August 2016 by the U.S. Appeals Court for the Second Circuit that had affirmed a lower court’s decision to dismiss the case filed by two whistleblowers, including one who had worked in Charlotte.
The high court ordered the appeals court to give the case further consideration in light of a June 2016 Supreme Court ruling that interpreted an aspect of the federal whistleblower law called the U.S. False Claims Act.
“It has obviously breathed new life into our case, which is very important for everyone involved,” said Joel Androphy, a Houston-based attorney representing the plaintiffs. “This has been a very long road.”
Bank doesn’t specify what prompted four managers’ termination
Board may yet release more information, person familiar says
Wells Fargo & Co. fired the head of its consumer credit-card business and three other senior managers as the bank’s board examines how abusive sales practices spread through branches before spiraling into a national scandal last year.
Shelley Freeman, the former Los Angeles regional president who went on to run consumer-credit solutions, was terminated, along with Arizona lead regional president Pam Conboy, former community bank risk chief Claudia Russ Anderson and Matthew Raphaelson, 55, who led community bank strategy and initiatives. The bank announced the moves in a statementTuesday, saying the four won’t get bonuses for 2016 and will forfeit unvested equity awards and outstanding options.