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On the Hill Episode 27: Hamish Hume, Partner, Boies Schiller Flexner

In this episode of On the Hill, Hamish Hume, partner with Boies Schiller Flexner, discusses his victorious $612 million, breach-of-contract lawsuit on behalf of Fannie Mae and Freddie Mac shareholders.  

In August 2023, a Washington D.C. jury found the Federal Housing Finance Agency (FHFA), the regulator of Fannie and Freddie, acted improperly when it implemented the “net worth sweep” in 2012, and diverted their profits to the federal government instead of paying dividends to shareholders. The sweep was established after Fannie and Freddie failed and were put into conservatorship in September 2008 during the Global Financial Crisis (GFC). 

"It was a rescue that turned into a robbery," Hume said. 

The jury awarded Fannie Mae junior preferred shareholders $299.4 million in damages; the Freddie Mac junior preferred shareholders $281.8 million in damages; and Freddie Mac’s common stock shareholders $31.2 million. The award is a tiny silver in the hundreds of billions in profit that Fannie and Freddie sent to the Treasury Department.  

“In the very first year of the net worth sweep, the Treasury received a dividend of $130 billion,” Hume said. “If there had been no net worth sweep, it would have received, under the 10% dividend, $18.9 billion. So it got $111 billion of excess cash in the very first year. I think that stuck with the jury.” 

Hume’s case, the first win among many lawsuits filed by shareholders, took a decade to resolve. An earlier trial in October 2022 ended in a hung jury. Industry watchers expect FHFA to appeal the verdict. A separate case reached the Supreme Court, which ruled against the shareholders. 

"Just as the private sector needs to be respectful of the government's perspective and its need to protect the public interest, I think it's also in the public interest for the government to respect the private sector perspective,” Hume said. “Otherwise, it's not going to work in the future, and people are not going to trust the system and the legal principles that are supposed to govern. That's the lesson that I hope will be drawn from this." 

Hume, a general litigator who has specialized in tax and constitutional law, has successfully served as lead trial counsel for significant firm clients and Fortune 500 companies. He received his J.D. from the University of Virginia School of Law and B.A. degrees from Oxford and Yale. He was named to Lawdragon’s list of 500 Leading Plaintiff Financial Lawyers in 2023; the 500 Leading Lawyers in America from 2002 to 2024; the 500 Leading Litigators. 

Listen to the podcast above.