Wise Man
6 hours ago
No, they can't "reclassify" something that happened in the past. It's like changing history.
"Take any action" includes misleading to the public "in the best interests of the FHFA", and "authorized by this section" because it's destined to put FnF in a sound and solvent condition (FHFA-C's Rehab power).
The dividends existed despite the restriction and they've been applied towards a different end.
It's the only way to legalize the capital distributions that were restricted, and legalize them at the time of the disbursement.
You advocate 16 years with unlawful capital distributions and it's today when you fix it retroactively. Likely, because you are a rogue litigant that has filed frivolous lawsuits. Am I wrong?
This is how the SPS were paid off in early Conservatorship, as seen in my signature image.
Finally, regarding Fairholme, I wanted to highlight that Fairholme asked about the same thing that I've just pointed out.
The very Separate Account plan: whether the dividends were applied towards the reduction of the SPS, and thus, they weren't truly dividends.
I didn't want to highlight that there are documents out there about the Separate Account plan, that no one cares about, because the key is that it's set forth in the laws and regulation. Keep those docs.
DaJester
7 hours ago
"With a "reclassification" at the time of each dividend, you transmit the idea that the dividend can be approved, when it's unlawful. This way, the litigants and others are exonerated of the fact that they missed that a dividend is restricted."
Unlawful or not, the dividends happened. Now they could come out and say "just kidding" none of those were dividends, we didn't even classify them as dividends at the time and we were just lying to you, because we are from the government, and we can. Possible, but I just don't think that is as likely as - they were dividends at the time, and they can later reclassify them if they choose to be more compliant with the laws.
"Fairholme withdrew this motion when he was aware that he was asking for documents that would prove the existence of a Separate Account plan. Source. So much for the "hidden documents."
Unless you know what these sealed and hidden documents are, they are not evidence of your Separate Account Plan. As much as I hope you are right, I just don't see any hard evidence.
the NWS goes on today, with another capital distribution restricted: the SPS LP increased for free in the absence of dividends. The same Common Equity Sweep as before with the dividends. The only difference is that now it gets substituted for SPS in the Net Worth, so the NW grows.
I totally agree with you here - the Net Worth Swipe has not ended, it just shifted from Cash to LP. This is why after the Lamberth ruling, I expect something needs to be changed or re-written. If the cash sweep was a breach of the Shareholder agreement, then so is the LP sweep. This needs to become more visible and obvious for FHFA and Treasury to be compelled to fix it.
Rodney5
11 hours ago
I appreciate you DaJester. Educating the public is the best thing we can do.
To anyone new to this discussion.
The Senior Preferred Stock Purchase Agreement is a contract between two government agencies which Fannie and Freddie had no say so. The only legal contract is the one with the U.S. Congress, called the Charter Act. The Senior Preferred Stocks are illegal because the Stocks have an illegal commitment fee attached to it.
The Federal statutes are the Charter Act, the Safety and Soundness Act of 1992, as amended by HERA, Administrative Procedures Act, and potentially the Chief Financial Officers Act.
None of the current litigation makes any claims of violation of these acts. They all challenge the actions of the Conservator and attempted to squeeze the APA and the 5th amendment takings into the Actions of the FHFA-C within the terms of the SPSPA. all have failed to this point.
SPSPA which is a contract. 4617f bars courts from questioning the actions of a conservator. The stockholders’ statutory claims are barred by the Recovery Act’s strict limitation on judicial review. See 12 U.S.C. § 4617(f).
The Plaintiffs have to prove the FHFA / Treasury broke the law. No mention of Federal Statute.
JUSTICE BREYER told the Plaintiffs how to win. Quote: “Thank you. I think in reading this you could, with trying to simplify as much as possible, do you -- the shareholders' claim as saying we bought into this corporation, it was supposed to be private as well as having a public side, and then the government nationalized it. That's what they did. If you look at their giving the net worth to Treasury, it's nationalizing the company. Now, whatever conservators do and receivers do, they don't nationalize companies. And when they nationalized this company, naturally they paid us nothing and our shares became worthless. And so what do you say?” End of Quote, page 12
The link may not work anymore, the above statement was made and recorded in the transcript.
Link: https://www.supremecourt.gov/oral_arguments/argument_transcripts/2020/19-422_3e04.pdf
Millett and Ginsburg summarized the case and their 70-page opinion as follows:
Quote: “A number of Fannie Mae and Freddie Mac stockholders filed suit alleging that FHFA’s and Treasury’s alteration of the dividend formula through the Third Amendment exceeded their statutory authority under the Recovery Act, and constituted arbitrary and capricious agency action in violation of the Administrative Procedure Act, 5 U.S.C. § 706(2)(A). They also claimed that FHFA, Treasury, and the Companies committed various common-law torts and breaches of contract by restructuring the dividend formula.
We hold that the stockholders’ statutory claims are barred by the Recovery Act’s strict limitation on judicial review. See 12 U.S.C. § 4617(f). We also reject most of the stockholders’ common-law claims. Insofar as we have subject matter jurisdiction over the stockholders’ common-law claims against Treasury, and Congress has waived the agency’s immunity from suit, those claims, too, are barred by the Recovery Act’s limitation on judicial review. Id. As for the claims against FHFA and the Companies, some are barred because FHFA succeeded to all rights, powers, and privileges of the stockholders under the Recovery Act, id. § 4617(b)(2)(A); others fail to state a claim upon which relief can be granted. The remaining claims, which are contract-based claims regarding liquidation preferences and dividend rights, are remanded to the district court for further proceedings.“ End of Quote
Link: https://www.washingtonpost.com/news/volokh-conspiracy/wp/2017/02/21/d-c-circuit-concludes-recovery-act-bars-judicial-review-of-suits-against-fhfa-over-treatment-of-fannie-and-freddie-shareholders/
Here’s another example of failure lawsuit with no reference of the Regulator breaking the law.
UNITED STATES COURT OF FEDERAL CLAIMS
Wazee Street Opportunities Fund IV LP,
Filed 04/03/23
Quote: "This lawsuit does not challenge the foregoing arrangement made in
September 2008. While Plaintiffs do not concede that all the measures taken in September 2008 were justified or necessary, they are not here to challenge the placement of Fannie and Freddie into conservatorship at the height of the financial crisis, or the original deal struck by Treasury and FHFA at that time." End of Quote. Page 7
The lawyers are focused on the third amendment net worth sweep. By Public Law the whole contract is illegal, the contract is illegal based on the United States is not permitted to charge a commitment fee to be paid by the enterprises.
Link: https://storage.courtlistener.com/recap/gov.uscourts.uscfc.37252/gov.uscourts.uscfc.37252.30.0.pdf
Wise Man
13 hours ago
Of course! 16 years of statutory breaches will be solved today with a "reclassification", so you can sneak the 10% dividend on SPS issued by the GSEs, that have a rate similar to Treasuries as a UST backup in the dynamics of the Charter Act.
This is a slogan spread by all the rogues that have been peddling the Government theft story since day one.
These felonies have been covered up by the litigants:
▪️Breach of the FHFA-C's Rehab power (This is Gary Hindes when he was told that the 10% dividend that he advocated, is the same breach of the FHFA-C's Rehab power as the NWS dividend that he was denouncing in his lawsuit, and he ended up removing this claim in an amended complaint).
▪️Breach of the Restriction on Capital Distributions.
The same people that deny that the NWS goes on today, with another capital distribution restricted: the SPS LP increased for free in the absence of dividends. The same Common Equity Sweep as before with the dividends. The only difference is that now it gets substituted for SPS in the Net Worth, so the NW grows.
16 years of an outlaw Federal Agency is promoted by Mark Calabria as well.
However lawless you suspect federal agencies might be, I can assure you from first hand observation, it’s a lot worse— Mark Calabria (@MarkCalabria) June 29, 2024
Instead of the reality that each capital distribution (10% dividend, NWS dividend and SPS LP increased for free) existed, and, thanks to the FHFA-C's Incidental Power: "Take ANY ACTION authorized by this section, in the best interests of FnF or the FHFA", they've been applied towards the exceptions to the Restriction on Capital Distribution in order to legalize them.
No reclassification ever took place. It's the same capital distribution, applied towards a different end.
With a "reclassification" at the time of each dividend, you transmit the idea that the dividend can be approved, when it's unlawful. This way, the litigants and others are exonerated of the fact that they missed that a dividend is restricted.
Fairholme's Berkowitz and his attorney, David Thompson, spotted it as well, when the RFP 12 asked the Treasury Department of his buddy Mnuchin:
Whether Treasury dividends were to advance taxpayers interests and/or prioritize Treasury's financial interest. Source
Fairholme withdrew this motion when he was aware that he was asking for documents that would prove the existence of a Separate Account plan. Source.
So much for the "hidden documents".
Therefore, in order to uphold the law, they were assessments sent to UST in the form of capital distributions and under the guise of dividend payments, that have been applied towards the exceptions to the restriction in order to legalize them: reduction of the SPS. Then, for the recapitalization.
And we have proof of the intent to carry out this separate account plan:
-The same plan has already been carried out by the FHFA with regard to the FHLBanks and with the same protagonists (ST at the FDIC and DeMarco at the accountant of the scheme, GAO. Then, UST), set forth in a law entitled SEPARATE ACCOUNT TO ENSURE REPAYMENT OF PRINCIPAL. In our case, the principal of the obligation with taxpayer is captured in the SPS LP, that has to be paid back asap.
-The NWS dividend came out due to the fact that the 10% dividend was causing the death spiral (it prompted a loss, more SPS are increased and the subsequent reduction of the Funding commitment). This was solved with the NWS dividend. So, it's the fastest speed for the repayment of SPS. This is captured also in the scheme of the FHLBanks that weren't required to send an assessment into their Separate Account, when they posted losses.
The NWS dividend wasn't meant to deprive the JPS holders of their "implied contract" for the expectation of dividends, at a time when the dividend was impeccably suspended. This is what judge Lamberth came up with, playing the hedge funds' game:
No genuine dispute remains on the fact of harm on the theory of plaintiffs were denied dividends that they otherwise were reasonably certain to receive. Source.
-The fact that the FHFA Acting Director enabled the continuation of this Separate Account for the repayment of SPS, with the July 20, 2011 CFR 1237.12, for the moment that the SPS had been fully paid off, they needed another exception to apply the capital distributions towards: for their recapitalization, either in the exception 1, 2, 3 and 4, because it "(c) supplements and shall not replace or affect the restriction on capital distribution by statute: U.S. Code 4614(e)", and the restriction itself is meant for the recapitalization.
There you are, the intent of a follow-on plan thanks to "the supplemental".
-The fact that the Trump Administration deliberately chose another capital distribution restricted, is another evidence of officials pursuing this plan of deception, with the SPS LP increased for free as compensation to UST in the absence of dividends. With Mnuchin and Calabria making sure that it's clearly stated that the dividends came to an end, both because this new scheme appears as a stand alone covenant in the SPSPA, unrelated to the covenant of SPS LP increase equal to the amount of dividend, and because the UST said so in the press release.
We clearly can see that the nowadays Common Equity (Retained Earnings is Core Capital and CET1) is swept to the UST, when it's substituted for SPS in the Net Worth of FnF, and, necessarily, this Common Equity is kept in escrow, because the capital distribution was restricted and because the CET1 is necessary to uphold the FHFA-C's Rehab power: put FnF in a sound and solvent condition.
This is the reason why there is Financial Statement fraud in FnF, so that you don't see it clearly. Instead, we have the attorney David Thomson praising it as the Wonderland and seeking constitutional damages, because the "for cause" removal restriction prevented it from happening sooner, firing Mel Watt before.
-Finally, we can add as a proof, that HERA didn't strike the original UST backup of FnF with a rate similar to Treasuries, which is the only exception to the Fee Limitation of the United States (PROHIBITION), when it enacted an homonymous second UST backup at an up to infinite rate and in an up to an infinite amount (what kind of terms and condition are these?) and place it just below the original one (Subsection (c)) in the Charter Act. The SPS could well have been purchased through (c) and (b) redeemable obligations, as the Preferred Stocks are redeemable obligations in respect of Capital Stock.
BOTTOM LINE
The FHFA and its hedge-funds guard that have a dozen of rogue attorney behind, are the ones peddling this idea of resolution cattle market-style, by two guys sat a table today messing around: "And we add two goats and a cow! That seals the deal!".
A "reclassification" today, is like stating that nothing has happened during the 16 years into conservatorship and what you've seen is the fruit of your imagination. Thus, everything will be decided today.
The reality is that all the capital distributions have existed and they CANNOT be dividends because those are RESTRICTED (prohibition). They've been legalized at the time of each disbursement, without reclassification.
You can't reclassify what didn't really exist because it's restricted. They were capital distributions under the guise of dividends, thanks to the Incidental Power.
These Fanniegate attorneys and others peddling the government theft story in formal documents, seek to be exonerated for the felonies of cover-up of the breaches of the statutory provisions pointed out above, that have led to a case of stock price manipulation.
Fanniegate, a beautiful story of legislative and regulatory machinery working in perfect harmony.
As I said before, the problems are the "take any action" and the global pandemic of "External Position".
There is no "Chevron deference" when every action came out as a result of an express grant of authority in the law.
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