NEW YORK, Oct. 7, 2008 (GLOBE NEWSWIRE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) ("Pomerantz") has filed a class action lawsuit in the United States District Court for the Southern District of New York (Case No. 08 Civ 8547 (GEL)), against Lehman Brothers, Inc. (Pink Sheets:LEHMQ); Merrill Lynch, Pierce, Fenner & Smith Incorporated (NYSE:MER); J. P. Morgan Securities, Inc. (NYSE:JPM); and Goldman Sachs & Co. (NYSE:GS) (collectively, the "Underwriter Defendants"); and certain officers of Fannie Mae. The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The class action was filed on behalf of purchasers of the Federal National Mortgage Association a/k/a Fannie Mae's ("Fannie Mae" or the "Company") (NYSE:FNM) 8.25% Fixed-To-Floating Rate Non-Cumulative Preferred Stock Series S (the "Preferred Stock"), which were first offered to the public on or about December 11, 2007 (the "Offering"). The Class Period extends from December 11, 2007 until September 5, 2008.

If you wish to serve as lead plaintiff, you must move the Court no later than November 7, 2008.

The Offering involved the sale of approximately 280 million shares of the Preferred Stock at a price of $25 per share. Thus, Fannie Mae raised about $7 billion in this Offering, less underwriting fees. The new capital was to help shore up the Company's balance sheet so that capital requirements could continue to be satisfied, enhance shareholder value and provide stability to the secondary mortgage market. Fannie Mae's senior officers, defendants here, repeatedly assured the marketplace that this round of capital-raising would put the company on a sound financial footing and that they believed that additional infusions of cash would not be necessary for the foreseeable future.

The four Underwriter Defendants were the lead underwriters for the Offering. As such, they participated in the review and drafting of the Offering Circular, which was the official sales document for the Offering, solicited sales of the Offer, and identified themselves, on the cover of the Offering Circular, as the lead underwriters for the Offering. As co-book-running managers, Lehman Brothers Inc. and Merrill Lynch each purchased, for resale, 100,800,000 shares of the Preferred Stock; and as senior co-managers of the offering, Goldman Sachs & Co. and J.P. Morgan Securities, Inc., each purchased, for resale, 22.4 million shares.