Bruce Berkowitz: D.C. Circuit Should Upend Treasury’s Net Worth Sweep

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From Bruce Berkowitz’s Fairholme Capital

The D.C. Circuit Should Upend Treasury’s Net Worth Sweep

Legal scholar Richard Epstein urges the U.S. Court of Appeals for the District of Columbia Circuit to upend the Net Worth Sweep in a Forbes piece published this week.

He contends that “a close examination of the [Senior Preferred Stock Purchase Agreement] supports the conclusion that the entire Third Amendment was an elaborate device to strip the private shareholders of all their wealth in Fannie Mae and Freddie Mac, by devices so crude that if there has been adopted by private parties, all of them would have gone to jail.”

After analyzing the oral argument in Perry Capital v. Lew in the D.C. Circuit, he says “it becomes clear that the earlier opinion of Judge Royce Lamberth on September 30, 2014—which wrongly sustained the government’s position on all counts— should not be allowed to stand given its incurable internal weaknesses.”

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