The federal judge overseeing the Fairholme Fund’s lawsuit against Treasury has denied former Fannie Mae CFO J. Tim Howard admission as an expert to view the material from discovery.
Government attorneys opposed Fairholme’s move to bring Howard on as an expert to view discovery, which is covered under a protective order. They argued that Howard’s knowledge and bias would cause “damage to the economy.”
Howard was hired by Fairholme Funds in their lawsuit against the U.S. Treasury.
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.
This opened up, on a limited basis, more than 800,000 documents to discovery.
Attorneys for the federal government have argued that Howard should not get to serve as a consultant with access under the limited discovery a federal judge granted, arguing that Howard was forced out of Fannie in an accounting scandal, even though investor lawsuits against Howard were found to be without merit and his case was settled with the Securities and Exchange Commission.
Why either allegation should matter was not explained.
The judge's order can be read here.
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 government has consistently opposed discovery as being “dangerous” to the economy if these two year old documents were to become public. Now it is opposing a qualified expert to view these documents over charges of ‘bias,’” a spokesperson for Investors Unite told HousingWire. “Even though he’s been out of the company for 10 years. Bottom line — they’re hiding something. It’s going to come out.”
Investors Unite was formed by Tim Pagliara, a Tennessee activist investor and CapWealth Advisors Chairman and CEO. It is a coalition of nearly 1,000 private investors from all walks of life, committed to the preservation of shareholder rights for all invested in Fannie Mae and Freddie Mac.
Late last month, retiring District Judge Royce Lamberth threw out a separate lawsuit brought by investors led by Perry Capital against the Federal government's control over Fannie Mae and Freddie Mac.