FOR IMMEDIATE RELEASE
Monday, December 28, 2015
Contact: Jeff Gohringer, 202-618-6430 or email@example.com
Washington, DC — Better Markets announced today that it has filed a motion in the U.S. Court of Appeals for the District of Columbia Circuit seeking leave to submit an amicus brief supporting the government’s position in Perry Capital v. Jacob J. Lew. Although the government bailed out mortgage finance giants Fannie Mae and Freddie Mac during the 2008 financial crisis and rescued them from certain bankruptcy, some shareholders are now trying to roll back these measures and put taxpayers back on the hook for their losses while they pocket the profits. The Better Markets brief makes clear that their claims are meritless.
“The government’s massive infusion of almost $200 billion in taxpayer funds during the 2008 financial crash is the only thing that kept Fannie Mae and Freddie from complete collapse. Their insolvency would have deepened an already historic financial crash by throwing the housing markets and global financial markets even further into chaos, and triggering a catastrophic chain of failures across major financial institutions. Shareholders who gambled on the stock price should not be allowed to roll back the government’s actions and force taxpayers to return money that is rightfully theirs in an attempt to restore the broken pre-crisis status quo,” said Better Markets President and CEO Dennis Kelleher. “The district court rejected all of the shareholders’ claims and the appellate court should affirm that decision,” he added
Better Markets’ brief highlights that if Fannie Mae’s and Freddie Mac’s shareholders prevail, the message will be clear: Even financial institutions that engage in reckless behavior stand to receive—along with their shareholders—not only a generous taxpayer-funded bailout, but also the opportunity to later bite the hand that fed them by challenging the terms of their rescue and seeking once again to unfairly burden the U.S. taxpayers.
A ruling in favor of shareholders would rescind billions of dollars in repayments that taxpayers rightfully received from Fannie Mae and Freddie Mac, and it would restore a deeply inequitable and risky pre-crisis status quo where the GSEs’ profits flow to its shareholders but the substantial financial risks associated with their operation fall to the taxpayers.
It would also undermine the government’s ability, when confronted with new and unforeseen emergencies in our financial markets, to act decisively through legislation and regulatory action without fear of opportunistic claimants later challenging their actions. Such a ruling would discourage the dramatic steps sometimes necessary to avoid financial crises, and it would undermine confidence in the government’s actions, potentially prolonging or exacerbating financial crises once they occur.
Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.