Fannie Mae and Freddie Mac Stock Losses
The sub-prime mortgage market has led to the collapse of two quasi-governmental organizations, Fannie Mae and Freddie Mac. Both companies were the largest issuers of preferred stock over the last ten years. In turn, Wall Street has underwritten much of this debt and unloaded it on unsuspecting investors looking for income-generating investments that are consistent with their risk profile.
Many investment advisors touted stock in Fannie Mae and Freddie Mac as conservative, with the ability to produce a steady income through above average dividends. Moreover, many investment advisors told clients that the federal government would insure against significant losses of either institution adding to their safety.
Financial advisors should have diversified their client's portfolios and made clear the risks associated with purchasing these stocks.
Napoli Bern & Ripka LLP is investigating scores of these claims. Please contact us and see if we can help you.
