ABA Journal - Law News Now

Securities Law

Suits Announced Against Fannie Mae and Merrill Lynch

Posted Sep 16, 2008, 11:49 am CST
By Debra Cassens Weiss

Investors unhappy with the government takeover of Fannie Mae and the buyout of Merrill Lynch are filing lawsuits against the companies.

The suit against Fannie Mae will be filed by investors who were encouraged to buy the company’s preferred shares, Reuters reports. They are represented by Joseph Cotchett of Cotchett, Pitre & McCarthy in Burlingame, Calif.

Preferred shareholders were told just two months ago, “Buy the preferred shares, you can never go wrong,” Cotchett told Reuters.

Meanwhile, Merrill Lynch shareholders will contest the terms of the investment bank’s $50 billion purchase by Bank of America, Reuters reports in a separate story. The suit will be filed by Wolf Haldenstein Adler Freeman & Herz.

Lawyer Gregory Nespole told Reuters that the deal is "wholly unfair to stockholders."

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