SEC Announces Start of $357 Million Fair Fund Distribution Process in Fannie Mae Settlement
FOR IMMEDIATE RELEASE
Washington, D.C., April 30, 2007 - The Securities and Exchange Commission today announced the beginning of the distribution process for a $357 million Fair Fund created as part of a settlement last year with Federal National Mortgage Association (Fannie Mae) on charges of financial fraud in connection with the preparation of its annual and quarterly financial statements. The distribution is expected to be completed by October.
Potentially eligible claimants include any person or entity that purchased Fannie Mae common stock (ticker symbol FNM) between Jan. 14, 1999 and Dec. 22, 2004, or Fannie Mae Class N preferred stock (ticker symbol FNMprN) between Sept. 25, 2003 and Dec. 22, 2004, according to the court-approved distribution plan. The distribution agent will endeavor to identify potentially eligible claimants; however injured investors also can request a claims packet directly from the distribution agent. More information is available at www.SECFannieMaeSettlement.com.
"We are pleased to announce the start of the Fannie Mae distribution process," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "This expeditious distribution process illustrates the Commission's continuing commitment to improving the speed with which funds are returned to defrauded investors in SEC enforcement actions."
The U.S. District Court of the District of Columbia approved the Fair Fund and its distribution plan on April 16, and appointed Jeffrey D. Dahl, with Minneapolis-based Rust Consulting, Inc., as distribution agent.
The Fair Fund provision of the Sarbanes-Oxley Act of 2002 gave the SEC authority to increase the amount of money returned to harmed investors by allowing financial penalties paid by wrongdoers to be included in the distributions. To date, the SEC has distributed more than $1.2 billion in Fair Fund monies.
The SEC brought a settled action against Fannie Mae in May 2006 alleging that, between 1998 and 2004, Fannie Mae issued materially false and misleading financial statements in various reports and in filings with the SEC. Final Judgment was entered on August 9, and Fannie Mae paid approximately $350 million as part of the resolution of claims brought by the SEC.
Questions regarding the distribution should be directed to the distribution agent: