Industry News

Freddie Mac settles suit over retirement benefits for $4.65M

Suit alleged scandal hurt workers' 401k plans

Secondary-mortgage-market giant Freddie Mac has agreed to pay $4.65 million to settle a class-action lawsuit over its retirement plan, which was allegedly damaged by the accounting and management scandals that led the company to restate financial results for the years 2000 through 2002. The proposed settlement, in which Freddie Mac did not admit wrongdoing, is expected to bring a close to the Department of Labor's investigation of Freddie Mac's Thrift/401(k) savings plan. Freddie Mac said it will hire an independent fiduciary to review and approve the settlement and allocate settlement proceeds. Freddie Mac will conduct voluntary seminars to educate employees about investing and the importance of asset diversification. In April, Freddie Mac agreed to pay $410 million to settle shareholder lawsuits over accounting practices that led the company to restate three years of earnings....