Bingham partners Jordan Hershman and Jason Frank obtained the dismissal with prejudice of a putative securities class action brought against Freddie Mac in Ohio federal court by the Ohio Public Employees Retirement System (“OPERS”). Bingham has now won for Freddie Mac, on motions to dismiss, all of the multi-billion dollar federal securities class action cases that arose out of the 2008 financial crisis.

On Friday, Oct. 31, 2014, the Ohio federal court dismissed, with prejudice, all of OPERS’s claims, which were based on its allegations that Freddie Mac violated federal securities laws by making false and misleading statements concerning Freddie Mac’s business, risk management, and the procedures it put into place to protect the company from problems in the mortgage industry.

“We are gratified by the Court’s ruling, which dismisses all claims in the case,” said Hershman, lead counsel for Freddie Mac and co-chair of Bingham’s Securities Litigation Group.

In particular, OPERS made the centerpiece of its case an allegation that Freddie Mac misstated the extent of its exposure to subprime loans. In dismissing the case, the court ruled that OPERS failed adequately to plead the element of “loss causation,” i.e., that any alleged misstatement or omission concealed something from investors that, when disclosed, caused investor losses. The court also refused to permit OPERS any further amendment of its complaint, which triggered the dismissal of the case with prejudice.

The ruling is notable, in part, because the original judge in the OPERS case had previously denied Freddie Mac’s motion to dismiss, without substantive discussion of the parties’ arguments. Thereafter, the judge recused himself voluntarily, five years after the case began, under the statute requiring a judge to do so where there is a reasonable basis to doubt his impartiality. Freddie Mac then filed a motion with the new judge to vacate the prior judge’s denial of its motion to dismiss, and the new judge ultimately granted that relatively unusual motion to vacate, which then set the table for Bingham to win its renewed motion to dismiss.

Hershman and Frank were assisted on these motions by partner Jonathan Albano; counsel William Harb; associates Alison Eggers, Emily Renshaw, Caitlin Snydacker, and Nathaniel Bruhn; senior paralegal Victoria Curry; and securities litigation administrative coordinator Brenda Kelly.