Fannie Mae 2010 Annual Report Download - page 394

forms of relief, including rescission, damages, interest, costs, attorneys’ and experts’ fees, and other equitable
and injunctive relief.
On November 24, 2009, the Court granted the defendants’ motion to dismiss the Securities Act claims as to
all defendants. On September 30, 2010, the Court granted in part and denied in part the defendants’ motions
to dismiss the Securities Exchange Act claims. As a result of the partial denial, some of the Securities
Exchange Act claims remain pending against us and certain of our former officers. On October 14, 2010, we
and certain other defendants filed motions for reconsideration of those portions of the Court’s September 30,
2010 order denying in part the defendants’ motions to dismiss. These motions are fully briefed and remain
pending. Fannie Mae filed its answer to the consolidated complaint on December 31, 2010.
In re 2008 Fannie Mae ERISA Litigation
In a consolidated complaint filed on September 11, 2009, plaintiffs allege that certain of our current and
former officers and directors, including former members of Fannie Mae’s Benefit Plans Committee and the
Compensation Committee of Fannie Mae’s Board of Directors, as fiduciaries of Fannie Mae’s Employee Stock
Ownership Plan (“ESOP”), breached their duties to ESOP participants and beneficiaries by investing ESOP
funds in Fannie Mae common stock when it was no longer prudent to continue to do so. Plaintiffs purport to
represent a class of participants and beneficiaries of the ESOP whose accounts invested in Fannie Mae
common stock beginning April 17, 2007. The plaintiffs seek unspecified damages, attorneys’ fees and other
fees and costs and injunctive and other equitable relief. On November 2, 2009, defendants filed motions to
dismiss these claims, which are now fully briefed and remain pending.
Comprehensive Investment Services v. Mudd, et al.
On May 13, 2009, Comprehensive Investment Services, Inc. filed an individual securities action against certain
of our former officers and directors, and certain of our underwriters in the Southern District of Texas. Plaintiff
alleges violations of Section 12(a)(2) of the Securities Act of 1933; violation of § 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder; violation of § 20(a) of the Securities
Exchange Act of 1934; and violations of the Texas Business and Commerce Code, common law fraud, and
negligent misrepresentation in connection with Fannie Mae’s May 2008 $2.0 billion offering of 8.25% non-
cumulative preferred Series T stock. The complaint seeks various forms of relief, including rescission,
damages, interest, costs, attorneys’ and experts’ fees, and other equitable and injunctive relief. On July 7,
2009, this case was transferred to the Southern District of New York for coordination with In re Fannie Mae
2008 Securities Litigation and In re 2008 Fannie Mae ERISA Litigation.
Smith v. Fannie Mae, et al.
On February 25, 2010, plaintiff Edward Smith filed an individual complaint against Fannie Mae and certain of
its former officers as well as several underwriters in the U.S. District Court for the Southern District of
California. Plaintiff alleges violation of § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder; violation of § 20(a) of the Securities Exchange Act of 1934; common law fraud and
negligence claims in connection with Fannie Mae’s December 2007 $7.0 billion offering of 7.75%
fixed-to-floating rate non-cumulative preferred Series S stock. Plaintiff seeks relief in the form of rescission,
actual damages (including interest), and exemplary and punitive damages. On March 26, 2010, this case was
transferred to the Southern District of New York for coordination with In re Fannie Mae 2008 Securities
Litigation.
F-136
FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)