A federal appeals court on Wednesday revived Ohio’s lawsuit accusing Freddie Mac of defrauding the state’s $87.3 billion public pension fund by hiding its exposure to subprime and other risky mortgages prior to the 2007-09 financial crisis.
The 6th U.S. Circuit Court of Appeals said a lower court judge erred in finding that the Ohio Public Employees Retirement System (OPERS) did not plausibly allege that disclosure shortfalls by Freddie Mac and officials, including former Chief Executive Richard Syron, caused it to lose money on the company’s stock.
A spokesman for Freddie Mac said the McLean, Virginia-based mortgage finance company does not discuss pending litigation. The office of Ohio Attorney General Mike DeWine said it is pleased with the decision.
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