The Symbolic Importance of Fannie and Freddie Delisting

by Jacob Zamansky on June 16th, 2010 at 2:12 pm : Comments 000

Today’s announcement that shares of Fannie Mae and Freddie Mac are being delisted from the New York Stock Exchange serves as a painful reminder to a large group of retirees whose brokers convinced them to buy the preferred shares of both companies in 2008 when they were trading near $30.

Nearly every large Wall Street firm pushed Fannie and Freddie preferred stock and their brokers repeatedly assured clients that the shares were “government backed” and as risk free as Treasury bonds.

We represent about a dozen of these victims and many more have filed claims arguing that preferred shares of Fannie Mae and Freddie Mac were entirely unsuitable.  Given the chaos in the market during 2008, any investment with significant exposure to the collapsing mortgage market should have been deemed high risk and unsuitable for investors with conservative goals and objectives.

The collapse of Fannie Mae and Freddie Mac was ultimately caused by  misguided government policies.  However, greedy Wall Street brokers were responsible for exacerbating the damage.

Filed under Subprime Crisis, Wall Street
and Fannie Mae, Freddie Mac, unsuitable investment advice