WASHINGTON, D.C. — (Mealey’s) A federal judge in the District of Columbia on Dec. 6 granted final approval of a $153 million securities class action settlement between investors and Fannie Mae and KPMG LLP, ruling that the terms of the settlement and the plan of allocation meet all statutory requirements (In re: Fannie Mae Securities Litigation, No. 04-01639, D. D.C.; See May 2013, Page 11).
U.S. Judge Richard J. Leon of the District of Columbia granted final approval of the settlement, which calls for Fannie Mae and KPMG to pay $153 million in cash, plus interest, holding that the settlement is fair, reasonable and adequate.
Judge Leon also granted the investors’ motion for attorney fees of $29,152,612.27, or 22 percent of the settlement, as well as more than $15 million in litigation expenses.
Plan Of Allocation
Moreover Judge Leon rejected the objections of four investors, finding the objections to be meritless, and found the investors’ plan of allocation to be adequate.
Lead plaintiffs Ohio Republic Retirees System and State Teachers Retirement System of Ohio originally filed the suit in 2004, naming Fannie Mae and three of its executive officers as defendants.
The lead plaintiffs alleged, on behalf of all purchasers of Fannie Mae’s common stock and call options and sellers of Fannie Mae’s put options from April 17, 2001, to Dec. 22, 2004, that the defendants issued a series of false and misleading statements concealing the fact that Fannie Mae violated Financial Accounting Standard (FAS) 133 and intentionally manipulated its hedge transaction accounting to reflect misleading profits in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5.
The lead plaintiffs then amended their complaint to add KPMG as a defendant, and soon after, the District Court, in three separate rulings, dismissed each of the executives for failure to plead scienter.
The lead plaintiffs are represented by W.B. Markovits, Joseph T. Deters, James R. Cummins, Melanie S. Corwin, Christopher Stock and Francis P. Karam of Waite, Schneider, Bayless & Chesley in Cincinnati, Jeffrey Lerner of Bernstein Liebhard in New York and Daniel S. Sommers of Cohen Milstein Sellers & Toll in Washington.
Fannie Mae is represented by Jeffrey Kilduff, Robert Stern and Michael Walsh Jr. of O’Melveny & Myers in Washington.
KPMG is represented by Joseph Warin, Scott Fink, John Sturc, George Brown, Andrew Tulumello and David Debold of Gibson, Dunn & Crutcher in Washington.
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