Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Friday, October 19, 2007

SEC Distributes Fair Funds to Fannie Mae Investors

The SEC today announced that $356 million is being paid to investors harmed by the financial fraud at Fannie Mae (Federal National Mortgage Association) between 1998 and 2004. With today's payments, the SEC has distributed more than $3 billion overall since the agency was given authority to send financial penalties from SEC enforcement actions to the victims of financial fraud.

Today's $356,128,500 going to individual investors, pension plans and other victims represents the entirety of the money Fannie Mae paid to settle the SEC's fraud charges last year, plus interest.   The Fair Fund for Fannie Mae victims resulted from an enforcement action in May 2006 in which Fannie Mae paid $350 million to settle SEC charges that it issued materially false and misleading financial statements in SEC filings and in various reports disseminated to investors. Final judgment was entered in August 2006, and the U.S. District Court of the District of Columbia approved the establishment of the Fair Fund in April 2007.

http://lawprofessors.typepad.com/securities/2007/10/sec-distributes.html

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