U.S. Should Reward Longtime Fannie and Freddie Shareholders Over 'Day Traders': Nader
NEW YORK (TheStreet) -- Ralph Nader's fight against the U.S. government over Fannie Mae
But Nader's latest proposal on Fannie and Freddie isn't likely to endear him to those investors, which have amassed large positions in Fannie Mae and Freddie Mac securities since 2008, when the GSEs were placed into conservatorship and the price of their securities fell nearly to zero. In a recent interview with TheStreet, Nader made the following suggestion:
If [U.S. government officials] were real equitable, they would say 'Okay, for the day traders we're not giving dividends but we're going to declare a special dividend since the tax payers have been paid back before the end of the year. We're going to declare a special dividend for shareholders who held shares before the collapse and still hold them." So for the old shareholders, they get a dividend, and the new ones, you know, they knew what they were getting into. They weren't deceived. It had already collapsed.
Nader, who owned shares of Fannie and Freddie before they were put into conservatorship in 2008 and has hung onto those investments, has a long track record of fighting for the middle class. As a result, in pushing the government to restore the rights of shareholders, Nader has far more credibility than the large investors with whom he has allied himself. Still, Nader says he has no qualms about helping the big investors make a killing:
We wanted tougher regulation prohibiting them from the kind of lobbying they're doing, this is all before 2008, making them meet the demands for affordable housing, the needs of affordable housing which they were ignoring because they were going for the easiest profits. And so, you know, it's like saying that someone who's been around for years, 'These newcomers, aren't they tainting you?' No. I mean, you know, we're really well grounded in this. And they're raising interesting issues on the decision to grab all the profits. And if they're doing it and they've got lawyers to do it, well, that sort of helps us because we also agree that, that was an unlawful interpretation, changing the rules of the game unilaterally like that.