Shareholder Class Action Filed Against Fannie Mae

[Robbien]

Notice is hereby given that a class action lawsuit was filed in the United States District Court for the District of Columbia on behalf of all those who purchased publicly traded securities of the Federal National Mortgage Association (operating as Fannie Mae) (NYSE: FNM - News; "Fannie Mae" or the "Company") between October 11, 2000 and September 22, 2004, inclusive (the "Class Period").

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Darren J. Check, Esq.) toll-free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at [e-mail].

The complaint charges Fannie Mae, Franklin D. Raines, J. Timothy Howard, and Leanne G. Spencer with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company applied accounting methods and practices that do not comply with GAAP in accounting for the enterprise's derivatives transactions and hedging activities; (2) that the Company had materially understated its accrued cost-of-access liability by $50-$80 million; (3) that the Company used "cookie jar" accounting wherein Fannie Mae arbitrarily distributed current gains to subsequent quarters in a bid to keep its revenue and earnings growth steady; (4) that the Company deferred expenses to achieve bonus compensation targets; (5) that the Company had insufficient and inadequate internal controls; and (6) that as a result, the value of the Company's net income and financial results was materially understated at all relevant times.

http://biz.yahoo.com/prnews/040923/phth043_1.html