Court Reinstates Ohio's Freddie Mac Suit Over Pension Losses
The federal appeals court in Cincinnati has reinstated Ohio's lawsuit accusing Freddie Mac of defrauding the state's mammoth pension fund by systematically investing in sub-prime home loans.
The Ohio Public Employees Retirement System had invested in Freddie Mac and sued in 2008, alleging that misconduct by the lending giant caused millions of dollars in losses for the pension fund.
A district court previously dismissed the suit against Freddie Mac, which is formally the Federal Home Loan Mortgage Corp. But the 6th U.S. Circuit Court of Appeals reversed the dismissal Wednesday and sent the case back to district court after concluding the state had provided facts to support a plausible claim.
The Ohio attorney general's office says it's pleased.
A spokesman says Freddie Mac doesn't comment on pending litigation.