Class Status Rejected in Freddie Mac Investors’ Suit

Investors in preferred shares issued by the Federal Home Loan Mortgage Corp. (Freddie Mac) cannot bring a securities fraud class action against two former top Freddie Mac executives, the U.S. District Court for the Southern District of New York ruled March 27 (In re Federal Home Loan Mortgage Corp. (Freddie Mac) Securities Litigation).

Judge Miriam Goldman Cederbaum held that investor Jerry Jones did not show that the market for Freddie Mac’s Series Z preferred shares was efficient during the class period. As a result, the plaintiffs are not entitled to a classwide presumption of reliance.

Jones alleged that ...