Fannie Mae 2008 Annual Report Download - page 407

Employee Stock Ownership Plan between January 1, 2001 and the present. Their claims are based on alleged
breaches of fiduciary duty relating to accounting matters. The plaintiffs seek unspecified damages, attorneys’
fees, and other fees and costs, and other injunctive and equitable relief. On June 29, 2005, defendants filed a
motion to dismiss, which the Court denied on May 8, 2007. On July 23, 2007, the Compensation Committee
of our Board of Directors filed a motion to dismiss, which the Court denied on July 17, 2008.
On October 17, 2008, FHFA intervened in the consolidated case (as well as in the consolidated shareholder
class action and the shareholder derivative lawsuits pending in the U.S. District Court for the District of
Columbia) and filed a motion to stay those cases. On October 20, 2008, the Court issued an order staying the
cases until January 6, 2009. Upon expiration of the stay, discovery in those cases resumed.
Moore v. Fannie Mae, et al.
On October 23, 2008, Mary P. Moore filed a proposed class action complaint in the U.S. District Court for the
District of Columbia against our Board of Directors’ Compensation Committee, our Benefits Plans Committee,
and certain current and former Fannie Mae officers and directors. This case is based on ERISA. Plaintiff
alleges that defendants, as fiduciaries of Fannie Mae’s ESOP, breached their duties to ESOP participants and
beneficiaries with regards to the ESOP’s investment in Fannie Mae common stock when it was no longer
prudent to continue to do so. Plaintiff purports to represent a class of participants and beneficiaries of the
ESOP whose accounts invested in Fannie Mae common stock beginning April 17, 2007. The complaint alleges
that the defendants breached purported fiduciary duties with respect to the ESOP. The plaintiff seeks
unspecified damages, attorneys’ fees, and other fees and costs and injunctive and other equitable relief. On
November 12, 2008, we filed a motion with the Judicial Panel of Multidistrict Litigation to transfer and
coordinate this action with all of the other recently filed section 10(b), section 12(a)(2) and ERISA suits. The
Panel granted our motion on February 11, 2009, and this case is now pending in the U.S. District Court for
the Southern District of New York for coordinated or consolidated pretrial proceedings. On February 13, 2009,
the district court entered an order appointing Tennessee Consolidated Retirement System as lead plaintiff on
behalf of purchasers of preferred stock, and appointing the Massachusetts Pension Reserves Investment
Management Board and the Boston Retirement Board as lead plaintiffs on behalf of common stockholders. On
January 8, 2009, Moore filed a joint motion with David Gwyer in the U.S. District Court for the District of
Columbia to, among other things, consolidate this action with Gwyer II and for the appointment on an interim
basis of co-lead counsel. The defendants filed a response on January 27, 2009 arguing that their motion was
premature. On February 9, 2009, the U.S. District Court for the District of Columbia entered an order
extending the time for defendants to respond to Ms. Moore’s complaint until April 14, 2009.
Gwyer v. Fannie Mae Compensation Committee, et al. (Gwyer II)
On November 25, 2008, David Gwyer filed a proposed class action complaint in the U.S. District Court for
the District of Columbia against our Board of Directors’ Compensation Committee, our Benefits Plans
Committee, and certain current and former Fannie Mae officers and directors. This case is based on ERISA.
Plaintiff alleges that defendants, as fiduciaries of Fannie Mae’s Employee Stock Ownership Plan (“ESOP”),
breached their duties to ESOP participants and beneficiaries with regards to the ESOP’s investment in Fannie
Mae common stock when it was no longer prudent to continue to do so. Plaintiff purports to represent a class
of participants and beneficiaries of the ESOP whose accounts invested in Fannie Mae common stock
beginning April 17, 2007. The complaint alleges that the defendants breached purported fiduciary duties with
respect to the ESOP. The plaintiff seeks unspecified damages, attorneys’ fees, and other fees and costs and
injunctive and other equitable relief. On December 12, 2008, we filed notice of a potential tag-along action
with the Judicial Panel on Multidistrict Litigation to transfer and coordinate this action with all of the other
recently filed section 10(b), section 12(a)(2) and ERISA suits. On February 11, 2009, the Panel ruled on the
underlying motion to transfer and consolidate, and on February 20, 2009, the Panel issued a conditional
F-129
FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)