Lawsuit over Fannie Mae Retirement Plan Losses Can Proceed

Lawsuit over Fannie Mae Retirement Plan Losses Can Proceed

Reuters (10/23, Stempel) reports that US District Judge Paul Crotty ruled on Monday that a suit filed by Fannie Mae employees could proceed. The employees are suing the GSE over losses to company stock included in workers' retirement plan. Crotty agreed with the employees' claim that company executives knew, or should have known, that it was unwise to allow workers to continue investing in the stock as its value declined. He wrote, "If Fannie Mae's alleged situation...is not sufficiently dire to state a claim, it is not clear what would be sufficient." Reuters says the suit was filed against executives including former Chief Executive Daniel Mudd, as well as members of Fannie Mae's benefits plan committee.