$FNMA #FANNIEGATE

Messrs. Jacobs and Hindes filed their opening brief in the Third Circuit today, and a copy's attached to this e-mail message. "The Net Worth Sweep is an absurdity under state corporate law, as it gives Treasury a perpetual quarterly 'dividend' equal to the entire positive net worth of Fannie and Freddie," Messrs. Jacobs and Hindes tell the Third Circuit.  "Preferred stock of a Delaware or Virginia corporation cannot be given a cumulative dividend right committing the corporation to pay all profits every quarter, no matter how great, to the holder for all time to the absolute, permanent exclusion of dividends to all other stockholders," they explain.  Accordingly, they argue, Judge Sleet goofed when he concluded HERA insulates FHFA's illegal actions from judicial review.  Messrs. Jacobs and Hindes want the Third Circuit to vacate Judge Sleet's flawed ruling.17-3794-0016