Ex-Fannie Mae Chief, Franklin D. Raines, Is Dismissed From Investors’ Suit

Ex-Fannie Mae Chief Is Dismissed From Investors’ Suit

Franklin D. Raines, who resigned as chief executive of Fannie Mae in late 2004 amid revelations of extensive accounting improprieties at the mortgage finance company, has been dismissed from a long-running civil suit brought by Fannie Mae investors hoping to recover damages.

The federal judge overseeing the class action, Richard J. Leon of the United States District Court for the District of Columbia, ruled on Thursday that the investors’ lawyers had not proved that Mr. Raines knowingly misled shareholders about the company’s accounting and internal controls, a necessary hurdle for the case against him to continue.

“There is not only no direct evidence that Raines intended to deceive Fannie Mae’s investors,” Mr. Leon ruled, “there is no evidence that he even knew his statements were false.” At best, the judge continued, evidence submitted by the shareholders showed that Mr. Raines “acted negligently in his role as the company’s chief executive and negligently in his representations about the company’s accounting and earnings management practices.”

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Comments
2 Responses to “Ex-Fannie Mae Chief, Franklin D. Raines, Is Dismissed From Investors’ Suit”
  1. Bobbi Swann says:

    How insane is this……the taxpayers(Fannie)is footing the bill for the legal defense of Raines et al against those same taxpayers with an added bling (investors of fannie’s products) who is bringing suit against Raines….can stupid get any more stupid????? In the end Raines wins; legal fees are forked over by Fannie (paid by taxpayers)and more loss for the investors who sued since they are taxpayers as well!!!!! No way is Obummer going to allow his cronies and hand picked cabinet ‘slush rats’ to be prosecuted.

  2. Sarah says:

    Absolute travesty. There is no justice, there were no homeowners (victims) participating in the suit since the lower class isn’t permitted to participate in lawsuits of the rich and powerful. Without lawyers, where would the housing crisis be.

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