Lead Counsel In Fannie Suit Is Switched Out

The Wall Street Journal reports:

In a fraud lawsuit against Fannie Mae, there has been an unusual changing of the guard.

For more than two years, a Boston law firm was a lead counsel in the suit, which was filed after federal regulators alleged accounting irregularities at the mortgage company. (Fannie Mae denies committing securities fraud.)

On Aug. 3, Berman DeValerio Pease Tabacco Burt & Pucillo of Boston, a securities-litigation firm, was replaced as lead counsel by a New York firm previously uninvolved in the case.

It is rare that a lead plaintiffs' counsel knowledgeable about a case gets changed this far into litigation. Some attorneys involved in the case have speculated about whether political considerations played a role in the change. The Berman law firm had donated to Ohio Attorney General Marc Dann, a Democrat who is overseeing the case, but gave more to his Republican opponent.

A spokesman for Mr. Dann said campaign giving wasn't involved in the decision to switch law firms.

"There was a professional difference on strategy and tactics, so the attorney general made a decision that it was in the best interests of the case that a change needed to be made."

The spokesman declined to elaborate, saying office policy wasn't to comment on strategy and tactics. He said the decision was made with the understanding that some might raise questions about contributions.

Fannie Mae is going to need all the luck they can get on this trial.