Cowell won't pursue Fannie Mae lead plaintiff

Newly-elected State Treasurer Janet Cowell said today that she will not seek to lead a law suit against the federal government-backed mortgage company Fannie Mae.

Her predecessor, Richard Moore, petitioned a federal court in New York four months ago to be the lead plaintiff in a class action suit against Fannie Mae, because the state has lost more than $70 million in investments with the company. But the move drew opposition from state Attorney General Roy Cooper, who contended that Moore had overstepped his authority.

Cowell said that she is moving away from the matter because in a similar case involving Freddie Mac, the other government-backed mortgage company, Cooper convinced a federal judge to make another entity the lead plaintiff, reports Dan Kane.

Both cases drew interest in legal and political circles because Moore and Cooper have received campaign contributions from lawyers who often handle legal services for government agencies. Moore had planned to give some of the legal work to a law firm co-partnered by former Lt. Gov. Dennis Wicker, who backed Moore in his unsuccessful campaign for governor. Wicker has said he thinks his firm was in line for the work because it specializes in securities litigation.

Cowell said she is also reviewing the process for the awarding of legal work to outside law firms to make sure they meet bid requirements and have the expertise to perform the work. She said she also is working with Cooper to develop a list of law firms she can seek bids from if there is a need for outside legal work.