Richard X. Bove of Rafferty Capital Markets highlighted that Myron Steele, a retired Judge filed an amicus brief in the Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) lawsuits. The pressure continues to mounts for a negotiated deal as Judge Steele files case in Delaware. He was Chief Justice of the Supreme Court in Delaware before he took retirement.
Retired Judge Steele had submitted amicus brief in Federal National cases making two major claims. The first one of that the third amendment on Fannie Mae’s senior preferred stock is not enforceable, and secondly the Amendment violates Delaware law which clearly mentions that preferred shareholders are not eligible to get all the profits of the mortgage company leaving no profits for common shareholders.
Now, the retired judge has taken one step further and filed a case under his own name. Since Federal National is a Delaware entity, if the courts in that case find for Judge Steele, the Treasury will lose the game. The other cases will be unresolved since Delaware has alleged that mortgage company has broken the law.
Todd Sullivan reported that President Barack Obama, ex-President Clinton and lawyer Mr. Ron Kirk played golf a couple of weeks ago. He even released a picture of them on the golf course. Mr. Kirk Has served as Mayor Dallas in the past and was also a special trade executive appointed by the U.S. President.
He now works for a Perry Capital law firm, which is suing the Treasury and FHFA seeking the redress of the Federal National Third Amendment. This meeting may be a coincidence or an indication that the White House could probably lose control of the mortgage company.
Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) ended the last trading session almost flat as it closed with a very modest loss of 0.84% only. What was not disclosed by the closing figure was the intraday volatility as implied by the 3% difference between the day low and the final closing or even the day high. The volume of 2.4 million was lower than the daily average of 3.3 million, offering no clues. Most of the price action and the volume pattern in the last few sessions can be taken as normal market noise only and resistance can be expected from $2.50-$2.60.