A U.S. District Court has dismissed a derivatives lawsuit filed by Fannie Mae shareholders against some of the company’s former leaders and current directors.
The original lawsuit was intended to hold certain Fannie Mae directors and former executives, Franklin Raines and J. Timothy Howard, responsible for causing a series of accounting scandals that erupted at the government-sponsored enterprise (GSE) back in 2004. In the lawsuit, the shareholders were petitioning for a payback of executive bonuses paid out to certain former leaders.

Judge Richard Leon, who serves the U.S. District Court of Columbia, dismissed the derivatives case Thursday, saying the shareholders failed to follow the proper guidelines when filing the complaint. The judge said, under the appropriate guidelines, the plaintiffs are required to petition Fannie Mae before moving forward with a lawsuit against the company’s former leaders and directors.
Stephen B. Ashley, chairman of the Fannie Mae Board of Directors, praised the court’s decision on Thursday. “We are pleased that the Court found that the Board of Directors acted responsibly, and was fully able to act independently to protect and make decisions on behalf of the company and was not compromised by any self interest.”
Click here to read the court’s full decision.