Hedge fund firm Perry Capital LLC sued the U.S. Treasury Department claiming the government’s seizure of all profits from Fannie Mae and Freddie Mac is illegal and has destroyed shareholders’ holdings, Bloomberg News reported yesterday. Perry Capital, which seeks to represent investment funds in the litigation, said that it wants to stop the U.S. Treasury from enforcing a so-called third amendment to preferred stock purchase agreements, according to court papers. Perry Capital and hedge funds including Paulson & Co. have been lobbying Congress to consider allowing Fannie Mae and Freddie Mac to become independent again. Republican and Democratic lawmakers, along with President Barack Obama, have called for both mortgage finance companies to be liquidated, with the U.S. Treasury forecasting to collect more than $200 billion of profit from the agencies over the next decade.
