Freddie Mac shareholders cannot force the mortgage finance company to allow them to inspect its records, a federal court ruled yesterday, the Wall Street Journal reported today. The U.S. District Court for the Eastern District of Virginia yesterday dismissed a lawsuit brought by Timothy Pagliara, a shareholder of Freddie Mac. Pagliara had asked the court to order Freddie to allow him to inspect its books and records. Virginia law gives shareholders of companies the right to inspect company records so long as they have a legitimate purpose for doing so. Freddie Mac was chartered by the federal government but it is subject to Virginia corporate law. The court held that Freddie shareholders no longer possess a right to inspect the company’s records because those rights had been transferred to the Federal Housing Finance Agency when the company entered into conservatorship in 2008.
