Fannie Mae (FNMA), a mortgage finance company, and accounting firm KPMG, have agreed to pay US$153 million to settle a shareholder lawsuit filed by Ohio pension funds and others accusing the companies, regarding the firms issuing "false and misleading" financial reports, according to the Ohio attorney general.
According to the lawsuit, Fannie Mae and its then-auditor, KPMG, issued materially false and misleading financial reports publically that artificially inflated the price of Fannie Mae’s securities.
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The settlement aims to end the litigation, which had begun in 2004, and requires approval from the judge overseeing the case.
Fannie Mae’s general counsel, Bradley Lerman, said in a statement that the firm is "satisfied with the outcome and pleased to put the matter behind us".
KPMG said it is pleased that the long-running litigation "relating to matters at Fannie Mae occurring more than a decade ago" has been resolved and the settlement to avoid protracted litigation was "in the firm’s best interest".
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