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Deal pending in suit against Fannie Mae

The Massachusetts state pension fund on Monday announced a proposed $170 million settlement in a 2008 class-action lawsuit against Federal National Mortgage Association, known as Fannie Mae.

The state fund, the Pension Reserves Investment Trust, was colead plaintiff in the lawsuit, with the Boston Retirement Board.

It’s not yet clear how much the state and Boston funds will get from the proposed settlement, which includes thousands of stockholders.

“We are proud to have helped negotiate a meaningful recovery for Fannie Mae investors by stepping forward in this case,” Michael Trotsky, executive director of the $60.7 billion state fund, said in a statement.


Boston’s pension fund has assets of $4.1 billion.

The federal lawsuit alleged that shareholders lost money due to securities fraud by Fannie Mae and two of its former officers from Nov. 8, 2006, to Sept. 5, 2008. It alleged the defendants made false and misleading statements on the company’s internal controls and its exposure to subprime and other risky mortgage products.

The proposed settlement still needs court approval.

Beth Healy