NEW YORK, July 10, 2003 (PRIMEZONE) -- The law firm of Wechsler Harwood LLP ("Wechsler Harwood") has filed a lawsuit on behalf of its client and on behalf of purchasers of the securities of Federal Home Loan Mortgage Corp. and certain of its current and former officers (NYSE:FRE) ("Freddie Mac" or the "Company") between April 18, 2000 and June 6, 2003, inclusive (the "Class Period"), in the United States District Court for the Eastern District of Virginia.
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between April 18, 2000 and June 6, 2003, thereby artificially inflating the price of Freddie Mac securities. During the Class Period, the Company issued statements that failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company failed to properly classify hedges and assets with respect to derivative securities; (2) that the Company used "cookie jar" accounting wherein Freddie Mac deferred gains to subsequent quarters in a bid to keep its revenue and earning growth steady; (3) that the Company provided investigators with altered and misleading documents in order to conceal the Company's improper accounting; (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a result, the value of the Company's net income and financial results were materially misstated at all relevant times.
On June 9, 2003, the Company announced sweeping changes in its management team. These changes arose out of the Company's January 22, 2003 announcement that it would have to restate its financial results for fiscal years 2000, 2001, and 2002. In response to this announcement, shares of Freddie Mac fell $9.61 per share or 16 percent to close at $50.26 per share, wiping out $7 billion in market value.
If you purchased or acquired Freddie Mac securities during the Class Period, you may, no later than August 8, 2003, move the court to be appointed as Lead Plaintiff. There are certain legal requirements to serve as Lead Plaintiff.
Any member of the purported class may move the court to serve as Lead Plaintiff through counsel of their choice or may choose to remain an absent class member. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as Lead Plaintiff. To be a member of the class, you need not take any action at this time.
Wechsler Harwood, which has extensive experience in prosecuting investor class actions involving financial fraud, has prosecuted securities, antitrust and consumer class actions for over 10 years. For more information about Wechsler Harwood, please visit its website at www.whesq.com.
If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca