SUE 'EM GOOD !!!

( from The Calgary Herald)

Merrill Lynch & Co., Morgan Stanley and Citigroup Inc. were among underwriters accused in a lawsuit of misleading investors in a $2 billion offering of Fannie Mae securities in May.

The suit, filed Tuesday in Manhattan by shareholder Nicholas Crisafi, also names units of UBS AG and Wachovia Corp.

"They grossly overstated Fannie Mae's capitalization, claiming that the company had a substantial capital surplus when in fact it was including on its balance sheet, at full value, about $36 billion in deferred tax assets that were in fact valueless," according to the complaint.

The U.S. government seized control of Fannie and Freddie Mac on Sept. 7.