Former Fannie Mae CFO J. Tim Howard was just hired by Fairholme Funds to assist in unraveling the 800,000 pieces of documentation expected to be released during the discovery process in Fairholme’s lawsuit against U.S. Treasury.
Howard, as former chief financial officer for the GSE, is both highly knowledgeable about the inner workings of the institution and its inter-agency activities, and is regarded as an unbiased counselor who can decipher the information that’s revealed.
The team in the case will file a motion to allow Howard access to the protected information that the judge is allowing under the expanded discovery ruling.
Back in August, U.S. Judge Margaret Sweeney handed Fairholme Funds a huge victory when she ruled in favor of broad access in discovery to FHFA records going back years, rather than the narrow period in 2012 that the FHFA wanted to limit discovery to.
Sweeney also slapped down the argument from the Federal Housing Finance Agency that the court lacked authority, reminding the agency that it is not above the law.
Fairholme Funds serves as the point of entry for Investors Unite and other GSE shareholders suing the FHFA.
Sweeney granted discovery from the dates of June 2011 to August 2012, despite the FHFA arguing that it should only allow January 2012 to August 2012. She also granted discovery from the dates of April 2008 to December 2008, versus the September-December 2008 the government requested.
That is significant in that it will cover more of the pre-decision deliberations Investors Unite says is crucial to its case.
Investors in the GSEs want the mortgage giants to pay shareholder profits it owes, but the GSEs are not doing that as part of the bailout agreement with the federal government.
After Fannie Mae and Freddie Mac were bailed out during the financial crisis and placed into conservatorship, all profits were directed back to the U.S. Treasury.
Now that the government has been paid back, investors want their stake and their rights upheld.
Consumer advocate Ralph Nader, CapWealth Advisor CEO Tim Pagliara, investor Carl Icahn, and dozens of GSE shareholders from 20 states have joined together in this campaign under the banner Investors Unite.
A copy of the motion to allow Howard access can be read here.