The opinion of the court was delivered by: Honorable Paul A. Crotty, United States District Judge
The early years of this decade saw a boom in home financing which was fueled, among other things, by low interest rates and lax credit conditions. New lending instruments, such as subprime mortgages (high credit risk loans) and Alt-A mortgages (low-documentation loans) kept the boom going. Borrowers played a role too; they took on unmanageable risks on the assumption that the market would continue to rise and that refinancing options would always be available in the future. Lending discipline was lacking in the system. Mortgage originators did not hold these high-risk mortgage loans. Rather than carry the rising risk on their books, the originators sold their loans into the secondary mortgage market, often as securitized packages known as mortgage-backed securities ("MBSs"). MBS markets grew almost exponentially.
But then the housing bubble burst. In 2006, the demand for housing dropped abruptly and home prices began to fall. In light of the changing housing market, banks modified their lending practices and became unwilling to refinance home mortgages without refinancing.
Subprime and Alt-A mortgage borrowers were unable to meet their loan obligations and the value of subprime and Alt-A MBSs dropped precipitously. Given the ubiquity and proliferation of MBSs, the economy began to totter, and by 2008 was in near collapse. Litigation erupted immediately, including numerous suits involving the Federal National Mortgage Association ("Fannie").
Fannie played a critical role in developing and sustaining the secondary mortgage market. Indeed, Fannie was at the center of the U.S. housing market and one of its main driving forces. In 1968, Congress chartered Fannie as a government sponsored enterprise. (¶ 40.) Under its statutory charter, Fannie is to provide stability, liquidity, and affordability in the U.S. housing market. 12 U.S.C. § 1716-1719. Fannie discharges this mandate by investing exclusively in the secondary residential mortgage market - Fannie does not loan money directly to borrowers. (¶ 41.)
Specifically, Fannie's business is comprised of two components: (i) a creditguaranty business, and (ii) a portfolioinvestment business. (Id.) With respect to its creditguarantybusiness, Fannie purchases mortgages from primary lenders and resells those mortgages as MBSs, guaranteeing its mortgages if the initial borrower defaults. (¶ 42.) Fannie generates income through the fees it charges for its guarantees. (¶ 42-43.) With respect to its portfolioinvestment business, Fannie holds mortgage loans, mortgage-related securities, and other securities that it purchases from commercial banks for its own investment purposes, funding these portfolio purchases by issuing short and long term debt and debt securities to domestic and international capital market investors. (¶ 44.) Fannie profits when the income from mortgage assets and other investments in its portfolio exceeds the interest Fannie pays its debt-holders. (Id.)
Beginning in 2006, and partially responding to pressure from mortgage lenders, Fannie increased its investments in subprime and Alt-A mortgages. By year-end 2006, Fannie had an exposure of $345 billion in Alt-A and subprime assets; by late 2007, Fannie had a total subprime and Alt-A exposure of $405 billion.*fn2 (¶ 9, 76.) When the U.S. housing market nearly collapsed, Fannie plunged into insolvency. (¶ 17.)
On September 17, 2008, however, the Federal Housing Finance Agency ("FHFA"), one of Fannie's government regulators, assumed conservatorship of Fannie, citing concerns with regard to Fannie's credit risk, earnings outlook, and capitalization. (¶ 415, 417.) As Conservator, FHFA is mandated to take all appropriate actions to preserve and conserve Fannie's assets. 12 U.S.C. § 4617(b)(2)(D). In connection with the conservatorship, Fannie entered into a senior preferred stock purchase agreement with the U.S. Department of the Treasury. (¶ 415.) This agreement allowed Fannie to borrow up to $200 billion to remain solvent. (Id.) With the public announcement of the FHFA conservatorship, Fannie's stock plummeted nearly 90%. (¶ 20.)
While Fannie is congressionally chartered, it is also a publicly owned corporation and subject to the Securities Exchange Act of 1934 (the "Exchange Act"). Between August and October 2008, several securities class actions arising under the Securities Act of 1933 (the "1933 Act") and the Exchange Act were filed against Fannie and other defendants in both state and federal courts, including the Southern District of New York. In October 2008, a putative Employee Retirement Income Security Act ("ERISA") class-action was filed. The Judicial Panel on Multidistrict Litigation consolidated and transferred all of these cases to the Southern District of New York, including cases initially filed in state court and subsequently removed to federal court. In re Fannie Mae Securities and Employee Income Retirement Security Act (ERISA) Litigation, 598 F. Supp. 2d 1374 (J.P.M.L. 2009).
Plaintiffs bring this federal securities class action on behalf of themselves and a class of others similarly situated consisting of all persons and entities that, between November 8, 2006 and September 5, 2008 (the "Class Period"), purchased or otherwise acquired Fannie common stock (and/or options) or preferred stock, and were thereby allegedly damaged.
The Defendants in this action are Fannie, Fannie CEO Daniel H. Mudd ("Mudd"),*fn3 Fannie CFO Robert T. Blakely ("Blakely"),*fn4 Fannie CFO Stephen M. Swad ("Swad"),*fn5 Fannie CRO Enricho Dallavecchia ("Dallavecchia"),*fn6 and Fannie external auditor, Deloitte & Touche LLP ("Deloitte")*fn7 (Mudd, Swad, Blakely, and Dallavecchia collectively: the "Individual Defendants"; Fannie, the Individual Defendants, and Deloitte collectively: the "Defendants.").
On November 24, 2009, this Court granted Defendants' motion to dismiss claims against Fannie arising under the 1933 Act. In re Fannie Mae 2008 Securities Litigation, 2009 WL 4067259 (S.D.N.Y. Nov. 24, 2009). The remaining securities claims arise under Sections 10(b) and 20(a) of the Exchange Act, 15 U.S.C. §§ 78j(b) and 78t(a), and SEC Rule 10b-5, 17 C.F.R. § 240.10b-5 (the "Exchange Act Claims"). Specifically, Plaintiffs bring three Exchange Act Claims: (i) a claim against Fannie and the Individual Defendants for violations of Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and SEC Rule 10b-5, 17 C.F.R. § 240.10b-5;*fn8 (ii) a claim against Deloitte for violations of Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and SEC Rule 10b-5, 17 C.F.R. § 240.10b-5;*fn9 and (iii) a claim against the Individual Defendants for control person liability under Section 20(a) of the Exchange Act, 15 U.S.C. § 78t(a).
Plaintiffs principally allege that the Defendants intentionally or recklessly disregarded the housing market's increasing volatility, continued to invest in risky subprime and Alt-A mortgages, and materially misled investors as to: (i) the extent of Fannie's exposure to, and the risks inherent in, the subprime and Alt-A mortgage markets and (ii) Fannie's ability to manage the risks associated with these markets. Plaintiffs also allege that (iii) the Defendants violated the Exchange Act by filing materially inaccurate financial statements within the Class Period, and that, in connection with these financial statements, Deloitte violated generally accepted accounting principles ("GAAP") and generally accepted auditing standards ("GAAS").
Defendants now move under Fed. R. Civ. P. 12(b)(6) to dismiss the Exchange Act Claims. For the reasons that follow, the Defendants' motion is GRANTED IN PART and DENIED IN PART.
I. General Motion to Dismiss Standard
A pleading must "contain a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a). When considering a Fed. R. Civ. P. 12(b)(6) motion, the court "must accept as true all of the factual allegations contained in the complaint," and construe the complaint in the light most favorable to the plaintiff. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 572 (2007); see Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009) ("When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.").
Allegations that are no more than legal conclusions, however, are not assumed to be true. See Iqbal, 129 S.Ct. at 1949. Dismissal of a complaint under Fed. R. Civ. P. 12(b)(6) is appropriate if the plaintiff has failed to offer factual allegations sufficient to render the asserted claim plausible on its face. See id. To state a facially plausible claim, a plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "[T]he pleading standard Rule 8 announces does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.' Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (citation omitted). While legal conclusions can form the framework of a complaint, they must be supported by factual allegations. See id.
In ruling on a motion to dismiss an action alleging securities fraud, courts must accept the complaint's allegations as true, Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007), and draw all reasonable inferences in the plaintiff's favor. Caiola v. Citibank, N.A., 295 F.3d 312, 321 (2d Cir. 2002). The court only "assess[es] the legal feasibility of the complaint"; it does not "assay the weight of the evidence which might be offered in support thereof." Levitt v. Bear Stearns & Co., 340 F.3d 94, 101 (2d Cir. 2003).
When deciding a motion to dismiss, a court may consider documents attached as exhibits to the complaint and documents incorporated into the complaint by reference, as well as "documents that are integral to the plaintiff's claims, even if not explicitly incorporated by reference, and matters of which judicial notice may be taken." In re Gildan Activewear, Inc. Sec. Litig., 636 F. Supp. 2d 261, 268 n.3 (S.D.N.Y. 2009); see also ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007); De Jesus v. Sears, Roebuck & Co., 87 F.3d 65, 69 (2d Cir. 1996).
II. Heightened Pleading Standards of Rule 9(b) and the PSLRA
Fed. R. Civ. P. 9(b) sets forth a heightened pleading requirement for complaints alleging fraud: "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." See In re Pfizer Inc. Sec. Litig., 584 F. Supp. 2d 621, 632--33 (S.D.N.Y. 2008). This standard requires the plaintiff to "(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent." Stevelman v. Alias Research Inc., 174 F.3d 79, 84 (2d Cir. 1999).
In addition to the requirements of Fed. R. Civ. P. 8(a)(2) and 9(b), however, securities fraud claims under section 10(b) and Rule 10b-5 must also meet the heightened pleading standards set forth in the Private Securities Litigation Reform Act of 1995 ("PSLRA"). 15 U.S.C. § 78u-4(b). Among other requirements, the PSLRA requires "plaintiffs to state with particularity both the facts constituting the alleged [securities fraud] violation" and the other elements of the 10(b) cause of action. Tellabs, 551 U.S. at 313. To effectuate Congress's intent to eliminate baseless lawsuits through the application of rigorous pleading standards, the PSLRA mandates that a plaintiff alleging a section 10(b) action must: (1) specify each statement alleged to have been misleading and the reason or reasons why the statement is misleading, and (2) state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind. 15 U.S.C. § 78u-4(b)(1)-(2); Novak v. Kasaks, 216 F.3d 300, 306 (2d Cir. 2000). A plaintiff alleging securities fraud under Rule 10b-5 must plead particular facts showing that a statement or omission was misleading at the time it was made. Novak, 216 F.3d at 306, 309.
III. Elements of Claims under Section 10(b) and Rule 10b-5
Section 10(b) of the Exchange Act prohibits any person from using or employing "any manipulative or deceptive device or contrivance in contravention" of Securities and Exchange Commission ("SEC") rules. 15 U.S.C. § 78j(b). Rule 10b-5, promulgated by the SEC under Section 10(b), prohibits "any device, scheme, or artifice to defraud" and "any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made... not misleading...." 17 C.F.R. § 240.10b-5. To state a claim under Rule 10b-5, plaintiffs must allege that defendants "(1) made misstatements or omissions of material fact; (2) with scienter; (3) in connection with the purchase or sale of securities; (4) upon which plaintiffs relied; and (5) that plaintiffs' reliance was the proximate cause of their injury." Lentell v. Merrill Lynch & Co., 396 F.3d 161, 172 (2d Cir. 2005).
IV. Materiality and the Bespeaks Caution Doctrine
A complaint alleging a Rule 10b-5 claim fails if it relies on statements or omissions "that a reasonable investor would [not] have considered significant in making investment decisions." Ganino v. Citizens Utils. Co., 228 F.3d 154, 161 (2d Cir. 2000). There are two categories of statements that are immaterial and therefore cannot support a securities fraud claim. The first category includes "statements containing simple economic projections, expressions of optimism, and other puffery." Novak, 216 F.3d at 315. The second category of immaterial statements are those that are accompanied by adequate cautionary language - this is known as the "bespeaks caution" doctrine. Halperin v. eBanker USA.com, Inc., 295 F.3d 352, 357 (2d Cir 2002).
Specifically, "[t]he bespeaks caution doctrine allows courts to rule that a defendant's forward-looking representations contain enough cautionary language or risk disclosures to protect against claims of securities fraud." In re Prudential Sec. Inc. P'ships Litig., 930 F. Supp. 68, 72 (S.D.N.Y. 1996). The doctrine applies only to forward-looking statements, not representations of present or historical fact. See Rombach v. Chang, 355 F.3d 164, 173 (2d Cir. 2004). A plaintiff cannot state a claim by citing snippets of corporate disclosures and alleging it is misleading; rather, such disclosures must be "read as a whole." Halperin, 295 F.3d at 358. Moreover, "[t]he cautionary language must be specific, prominent, and must directly address the risk that plaintiffs claim was not disclosed." In re Flag Telecom Holdings, Ltd. Sec. Litig., 618 F. Supp. 2d 311, 322 (S.D.N.Y. 2009). "If a party is aware of an actual danger or cause for concern, the party may not rely on a generic disclaimer in order to avoid liability." Edison Fund v. Cogent Inv. Strategies Fund, Ltd., 551 F. Supp. 2d 210, 226 (S.D.N.Y. 2008).
V. Scienter Pleading Standards in Fraud Claims
A plaintiff claiming fraud can plead scienter "either (a) by alleging facts to show that defendants had both motive and opportunity to commit fraud, or (b) by alleging facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness." Lerner v. Fleet Bank, N.A., 459 F.3d 273, 290--91 (2d Cir. 2006). To satisfy Rule 9(b), a plaintiff asserting common law fraud must allege "facts that give rise to a strong inference of fraudulent intent." Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir. 1994). "Although speculation and conclusory allegations will not suffice, neither do we require 'great specificity' provided the plaintiff alleges enough facts to support 'a strong inference of fraudulent intent.'" Ganino, 228 F.3d at 169.
In considering whether the facts as pleaded give rise to a strong inference of fraudulent intent, courts must "consider plausible nonculpable explanations for the defendant's conduct, as well as inferences favoring the plaintiff." Tellabs, 551 U.S. at 323--24. Thus, "[a] complaint will survive... only if a reasonable person would deem the inference of scienter cogent and at least as compelling as any opposing inferences one could draw from the facts alleged." Id.
While personal interest is sufficient to establish motive, see Rombach, 355 F.3d at 177, a defendant's general desire to earn management fees is insufficient to satisfy Rule 9(b). Edison Fund, 551 F. Supp. 2d at 227 ("The desire to earn management fees is a motive generally possessed by hedge fund managers, and as such, does not suffice to allege a 'concrete and personal benefit' resulting from fraud."); see id. ("Motive may be pleaded adequately where the defendants are alleged to have benefited in 'some concrete and personal way.'"). Further, generalized allegations of a defendant's desire to maintain the appearance of corporate profitability or the success of an investment do not satisfy the motive prong of a Rule 9(b) claim. See In re JP Morgan Chase Sec. Litig., 363 F. Supp. 2d 595, 621 (S.D.N.Y. 2005) ("Generalized allegations of intent to maintain lucrative business relationships and to establish new ones do not set forth a motive for scienter purposes.").
Recklessness sufficient to establish scienter involves conduct that is "highly unreasonable and... represents an extreme departure from the standards of ordinary care." Chill v. Gen. Elec. Co., 101 F.3d 263, 269 (2d Cir. 1996). The allegations must approximate an actual intent to defraud. Id. Where a "motive is not apparent..., the strength of the circumstantial allegations must be correspondingly greater." In re Take-Two Interactive Sec. Litig., 551 F. Supp. 2d 247, 270 (S.D.N.Y. 2008). "Thus, a plaintiff pleading a § 10(b) violation based on defendant's recklessness faces two stiff challenges in this Circuit: the strength of the recklessness allegations must be greater than that of allegations of garden-variety fraud, and the inference of recklessness must be at least as compelling as any opposing inferences." In re Bayou Hedge Fund Litig., 534 F. Supp. 2d 405, 415 (S.D.N.Y. 2007).
"Loss causation" - a concept analogous to the common law concept of "proximate cause" - must be sufficiently alleged in order to sustain a successful fraud claim under Rules 10(b) and 10b-5. In order to successfully allege loss causation, a plaintiff must adequately plead facts which, if proven, would show that its loss was caused by the fraud and not by other intervening events. Lentell, 396 F.3d at 174; see also 15 U.S.C. § 78u-4(b)(4) ("[i]n any private action arising under this chapter, the plaintiff shall have the burden of proving that the act or omission of the defendant alleged to violate this chapter caused the loss for which the plaintiff seeks to recover damages"); Emergent Capital Inv. Mgmt., LLC v. Stonepath Group, Inc., 343 F.3d 189, 197 (2d Cir. 2003).
Where a "plaintiff's loss coincides with a marketwide phenomenon causing comparable losses to other investors, the prospect that the plaintiff's loss was caused by the fraud decreases," making it more difficult for a plaintiff to establish loss causation. Lentell, 396 F.3d at 173. To survive a motion to dismiss, however, a plaintiff must only allege either: "(i) facts sufficient to support an inference that it was a defendant's fraud - rather than other salient factors - that proximately caused plaintiff's loss," id. at 177, or (ii) "facts that would allow a factfinder to ascribe some rough proportion of the whole loss to... [the defendant's fraud]." Lattanzio v. Deloitte & Touche LLP, 476 F.3d 147, 158 (2d Cir. 2007).
Plaintiffs' Exchange Act allegations fall into three principal categories. Specifically, Plaintiffs allege that the Defendants knowingly or recklessly (I) materially misrepresented the extent of Fannie's exposure to the subprime and Alt-A mortgage markets and its related risks, including misrepresenting their underwriting standards as well as the geographic concentrations of Fannie's subprime and Alt-A investments; (II) materially misrepresented the quality of Fannie's internal risk management and controls; and (III) filed materially inaccurate financial statements that misrepresented Fannie's Core Capital and that, in connection with these financial statements, Deloitte violated GAAP and GAAS.
I. Fannie's Subprime and Alt-A Risk Exposure and Related Risks
In the mid-2000s, the mortgage market expanded into high-risk, non-prime mortgages. Traditionally conservative in its investments, these market-wide developments caused Fannie to reassess its investment strategy. According to an internal Fannie presentation dated June 27, 2005 (the "June 2005 Presentation"), Fannie considered whether it should "stay the course" by continuing to focus on low-risk, traditional, 30-year fixed-rate mortgages, or "meet the market" by focusing on high-risk, non-prime mortgage loans. (¶¶ 6, 69.) The June 2005 Presentation noted that Fannie was not prepared to meet the market since it lacked "capabilities and infrastructure" as well as "knowledge of the credit risks." (¶¶ 7, 67.)
As the market expanded into high-risk mortgages, Fannie came under increasing pressure to assume more risk. In late 2004 or early 2005, Countrywide Financial ("Countrywide"), Fannie's largest customer, threatened to sell its loans to other companies rather than Fannie, unless Fannie bought a larger share of its high-risk loans. (¶ 5.) Countrywide warned Fannie that it was becoming "irrelevant" by failing to invest in high-risk mortgage loans and MBSs. (¶ 64.)
In response to these market developments and client pressures, Fannie changed its book of business and underwriting practices during late 2005 and early 2006. (¶¶ 72--73.) Fannie decided to "meet the market" and focus on high-risk mortgage loans notwithstanding its lack of capacity to manage the risks associated with subprime and Alt-A mortgages, according to an internal Fannie report dated July 7, 2006 (the "July 2006 Report"). (¶ 71.) To that end, Fannie expanded its share of the Alt-A market from $187 billion at the end of 2005, to $276 billion in 2006, and to $350.6 billion by year-end 2007. (¶ 75.) As of late 2007, Fannie's combined subprime and Alt-A credit risk exposure was $405 billion, equal to 45% of Fannie's total assets. (¶ 76.)*fn10
a. Plaintiffs Allege that Fannie Misrepresented its Exposure to the Subprime and Alt-A Mortgage Markets and the Related Risks of Such Exposure
Plaintiffs allege that Fannie failed to disclose its new investment strategy and misrepresented the extentof its exposure to the subprime and Alt-A markets and its related risks. For example, the Complaint alleges that Fannie failed to inform investors that by the end of 2006, Fannie had $345 billion exposure to subprime and Alt-A mortgages and that by late 2007, Fannie had a total subprime and Alt-A exposure of at least $405 billion. (¶¶ 9, 76.)*fn11
The Complaint points to several public statements by either Fannie or the Individual Defendants indicating that Fannie's exposure to the subprime and Alt-A markets was limited and that the credit characteristics of Fannie's subprime and Alt-A profile were strong. (¶¶ 74, 78, 82, 189, 191, 194, 204, 206, 212.) For example, during a conference call on February 27, 2007, Mudd told investors that Fannie has "a book of business with very strong credit risk characteristics.... [O]ur exposures to some of the high-risk segments are extremely low for subprime...." (¶ 78); that Fannie does not "have so much [Alt-A loans] that this is a major, significant exposure on our books" (¶¶ 74, 191); and that "I want to emphasize... through all of this that Fannie Mae is in a good position...." (¶ 189). Similarly, in March, 2007, Mudd testified before Congress that "[w]e said a couple of years ago that this [subprime] market was evolving in a direction that we didn't like," and that "[w]e stepped away from it." (¶ 194.)
On May 2, 2007, Defendants stated that, as of December 31, 2006, approximately 2% of Fannie's single-family mortgage credit book of business was subprime. (¶ 82.) Mudd stated that the "important characterization of all of our efforts with respect to subprime and Alt-A... is that we stood back from the market. We adhered to our standards...." (¶ 204.) Additionally, Dallavecchia stated that "[o]n average, the credit characteristics of our Alt-A portfolio is comparable to the conventional book of business that we have." (¶¶ 82, 206.)
On August 16, 2007, Fannie issued a news release concerning its financial results for 2006. (¶ 212.) The news release quoted Mudd as stating that "[w]e made a decision several years ago to step back from the riskier margins of the mortgage market.... [W]e believe Fannie Mae is well positioned to weather the turmoil in the mortgage market.... Though the housing market continues to cool in 2007 and the credit environment remains challenging, I believe Fannie Mae is well situated for the future.... Strategic decisions we made in the past several years - particularly with respect to our discipline in the non-traditional parts of the mortgage finance market - have positioned us to do well as the housing market stabilizes...." (Id.)
Fannie's entry into the high-risk mortgage market increased Fannie's investments in states with high foreclosure rates, including California, Florida, Nevada, and Arizona. (¶¶ 119-- 21.) The Complaint alleges that Fannie failed to disclose that its book of business had concentrations in these high-risk geographic areas. (¶¶ 121, 202.)
b. Plaintiffs Fail to Adequately Plead Material Misrepresentations Regarding Fannie's Exposure to Subprime and Alt-A Mortgage Markets
Plaintiffs' allegations regarding material misrepresentations as to Fannie's subprime and Alt-A risk exposure fail for three independent reasons: (i) Fannie's public filings contained cautionary language that warned investors about the risks of Fannie's subprime and Alt-A mortgage investments; (ii) Plaintiffs fail to explain why the statements of Fannie or the Individual Defendants regarding Fannie's subprime and Alt-A investments were false; and (iii) Plaintiffs fail to adequately plead that either Fannie or the Individual Defendants acted with scienter in making statements about Fannie's subprime and Alt-A risk exposure.
i. Fannie's Public Filings Contained Cautionary Language Warning Investors About the Risks of Fannie's Subprime ...