Investments in Freddie Mac preferred stock have caused financial havoc for countless individual and institutional investors. A number of full-service brokerage firms sold Freddie Preferred Stock (including Series W (FRE-PW), Series X (FRE-PX), Series Y (FRE-PY), and Series Z (FRE-PZ) as a safe, stable fixed-income investment, causing investors to overconcentrate their portfolios. It’s what investors didn’t know that has come back to haunt them.
Offering circulars for Freddie Preferred Stock failed to disclose a number of risks associated with these investments. Specifically, information was not readily apparent regarding Freddie Mac’s exposure to mortgage-related losses or the fact that the company was facing monumental capital issues.
Freddie Mac offered preferred shares to investors as late as November 2007, with an offering of its Series Z at a price of $25.55. In September 2008, Freddie Mac Preferred Stock, Series Z, declined 95%, trading at $1.25 per share.
If you’ve experienced substantial investment losses because a brokerage or financial advisor misrepresented the risks of Freddie Mac preferred shares, please contact us. We want to hear your story and advise you on your legal options.