Class-action specialist Milberg Weiss Bershad & Schulman LLP has filed suit against beleaguered mortgage financing concern Fannie Mae, charging the company with violations of the Securities and Exchange Act of 1934 and making false and misleading statements that ultimately led to a "scandal of tremendous proportion."

The suit, filed on behalf of investors who purchased Fannie Mae securities between Jan 13, 2000 and Sept. 22, 2004, names as defendants: Federal National Home Loan Mortgage Corp., chief financial officer J. Timothy Howard, chairman and chief executive Franklin D. Raines and chief operating officer Daniel H. Mudd. The suit said that Fannie Mae was presented as a company that was "a safe and steady earner."

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