Pension funds challenge Freddie Mac secrecy in lawsuit

10/23/2009 | NYTimes.com

Three union-backed pension funds are going to federal court in an effort to invalidate secrecy agreements signed by Freddie Mac employees as a condition for receiving severance payments. The pension funds argue that Freddie Mac's top executives committed fraud by hiding the company's weak capital position, skyrocketing losses and huge exposure to high-risk mortgages. The Federal Housing Finance Agency, which oversees Freddie Mac, is attempting to use secrecy agreements to block former employees from testifying in the lawsuit. In separate actions, the Securities and Exchange Commission and federal prosecutors in Virginia are investigating whether Freddie deceived investors.

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