Freddie Mac to pay $410 mln to settle suit-official

Tue Jul 25, 2006 5:27 PM ET

NEW YORK, July 25 (Reuters) - Freddie Mac, the second-biggest U.S. mortgage finance company, will pay $410 million to settle a shareholder suit, according to Ohio Attorney General Jim Petro on Tuesday.

Payments will be made to investors who purchased Freddie Mac stock between July 15, 1999 and Nov. 20, 2003, and the the two Ohio pension funds that initiated the lawsuit, Petro said in a statement.

The lawsuit was initiated by the Ohio Public Employee Retirement System and Ohio's State Teachers Retirement System in 2003 when an internal probe found executives at the McLean, Virginia-based company had manipulated accounting rules that resulted in $5 billion restatement of earnings.