The Federal National Mortgage Association, better known as Fannie Mae, and Big Four accounting firm KPMG have agreed to pay $153 million to settle a securities class action that has been litigated over the past eight years. The class members are Fannie Mae shareholders, chiefly large institutional investors and pension plans. The complaint alleges that Fannie Mae, in concert with its auditor, KMPG, violated established accounting principles and published misleading financial reports, which caused Fannie Mae’s stock price to be artificially inflated. The settlement (available here) now awaits a preliminary approval ruling from U.S. District Judge Richard Leon.
No word on why Fannie Mae and other lenders have opted for cheerful nicknames rather than simple, staid acronyms.