A hedge fund firm is suing the government for diverting the profits of Fannie Mae and Freddie Mac to the Treasury
A hedge fund firm is suing the government for diverting the profits of Fannie Mae and Freddie Mac to the Treasury.
Pershing Square Capital Management, the hedge fund run by William Ackman, clains that the government is illegally stripping profit from investors in the companies’ common stock, according to a Reuters report.
The two mortgage finance giants are under government conservatorship after being bailed out in the wake of the financial crisis. Both have now returned more money to the government than they received in the bailout. Pershing’s complaint says that by next month, the government will have netted a $130 billion “windfall” through “the confiscation of the entire net worth” of Fannie and Freddie.
“The net worth sweeps make plaintiffs – and all of the other common shareholders – ‘shareholders’ in name only,” the complaint stated.
Pershing claims the government has violated the Constitution by taking private property for public use without just compensation, Reuters reported.
Pershing Square Capital Management, the hedge fund run by William Ackman, clains that the government is illegally stripping profit from investors in the companies’ common stock, according to a Reuters report.
The two mortgage finance giants are under government conservatorship after being bailed out in the wake of the financial crisis. Both have now returned more money to the government than they received in the bailout. Pershing’s complaint says that by next month, the government will have netted a $130 billion “windfall” through “the confiscation of the entire net worth” of Fannie and Freddie.
“The net worth sweeps make plaintiffs – and all of the other common shareholders – ‘shareholders’ in name only,” the complaint stated.
Pershing claims the government has violated the Constitution by taking private property for public use without just compensation, Reuters reported.
