Dick Bove: Another Bomb Exploding Part of the Government’s Case

Dick Bove: Another Bomb Exploding Part of the Government’s Case

Dick Bove on Sweeny’s judgement regarding Fannie Mae and Freddie Mac

Another Bomb Exploding Part of the Government’s Case

Judge Sweeney to Release More Documents

Corsair Capital Adds 17.5% In 2021, Notes “Change In Leadership” In Markets

According to a recent interview, Corsair Capital's founder Jay Petschek did not plan to be a hedge fund manager. After holding various roles on Wall Street, Petschek decided to launch the fund in January 1991, when his family and friends were asking him to buy equities on their behalf. He realized the best structure for Read More

The Quote Below is In Judge Sweeney’s Words; it is Blistering

“Moreover, in its re-examination of the documents attached to Perry Capital appellants’ motion, the court notes that the contents of these documents refer to, among other things, events— including decisions and forecasts— that occurred more than three years ago. For that reason, the court finds that sufficient time has passed to alleviate its initial concerns that disclosure of certain information to the public had the potential to adversely influence United States financial markets. With the passage of time, the court’s initial concern regarding a negative impact on the Nation’s financial markets or financial institutions has dissipated.

At issue here are excerpts from three deposition transcripts, as well as excerpts from four documents that are more than three years old. As a result, the government’s continued reliance on the May 29, 2014 declaration of Federal Housing Finance Agency (“FHFA”) Director Melvin L. Watt no longer retains the same potency that it did when originally supplied to the court in support of the entry of a protective order. Nevertheless, the government reiterates its original arguments when it asserts that “the futures of Fannie Mae and Freddie Mac are still uncertain and subject of vigorous debate,” Def.’s Opp. 5, once again relying on the Declarations of Melvin L. Watt and Michael A. Stegman, the Director of the FHFA and Former Counselor to the Treasury Secretary for Housing Finance Policy at the United States Department of the Treasury, respectively. While the court recognizes that protection of the Nation’s financial markets and fledgling financial institutions were legitimate goals when the court first entered its order, with the passage of time, the potential for harm to the Nation’s markets and then fledgling financial institutions no longer exists. Instead of harm to the Nation resulting from disclosure, the only “harm” presented is the potential for criticism of an agency, institution, and the decision-makers of those entities. The court will not condone the misuse of a protective order as a shield to insulate public officials from criticism in the way they execute their public duties. Thus, avoidance of “second-guessing” an agency’s decisions several years after the fact, as described by Mr. Watt, is, with the passage of time no longer a legitimate basis to maintain documents under a protective order. The court notes that from the inception of this litigation, the government has consistently maintained that the court lacks jurisdiction over this case because the United States had no control over the enterprises. Taking the government at its word, it is surprising that defendant is concerned with the unsealing of government officials’ deposition testimony.

Moreover, there can be no serious dispute that it is extremely rare for a document filed under seal in a civil case to remain so for all time. There is no suggestion that the documents subject to the protective order are classified as relating to national security. Nor do these documents contain trade secrets or proprietary information. However, even cases in which trade secrets and proprietary information are filed under seal and subject to a protective order, it is not unusual that after the passage of time, that same information is eventually unsealed because the protective order has outlived its usefulness. Indeed, because the government does not argue that information that it requests remain protected concerns matters involving national security, trade secrets, or proprietary information, or that specific privileges attach to any of the seven documents, it is clear that there is no longer a need to maintain the protected designation for them.”

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