WASHINGTON: A federal judge has approved a $153 million settlement of a securities fraud lawsuit against Fannie Mae and KPMG brought by shareholders of the mortgage giant.
The approval Thursday by U.S. District Judge Richard Leon came after nearly a decade of litigation. The shareholders, led by two Ohio public-employee pension funds, accused Fannie and its former accountant KPMG of causing them losses by intentionally manipulating earnings.
Fannie had an accounting scandal in 2004 that forced it to restate earnings by $6.3 billion. In 2006, federal regulators found risky practices and accounting manipulation at the company, which was fined $400 million.
A Fannie official said the settlement is “positive” for taxpayers and the company. Fannie and sibling Freddie Mac were rescued by the government in 2008. KPMG said it was pleased.