NEW YORK, Oct. 8 /PRNewswire/ -- Whatley, Drake & Kallas, LLC (WDK) today filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of purchasers of Fannie Mae's 8.25% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series S between December 11, 2007 and September 5, 2008, inclusive (the 'Class Period'). Fannie Mae (NYSE: FNM) is the nation's largest source of financing for home mortgages.

Investors who purchased the Series S preferred stock during the Class Period are eligible to pursue lead plaintiff status in this case, and can use the counsel of their choice.

In the complaint, filed today (October 8, 2008), plaintiffs allege that the defendants--including several former officers and directors of Fannie Mae and the underwriters responsible for the Series S preferred stock offering--knew or recklessly disregarded that Fannie Mae was grossly undercapitalized, in violation of Federal regulations, because of its overwhelming investments in subprime and Alt-A mortgages. These assets were not properly accounted for in violation of Generally Accepted Accounting Principles (GAAP). Fannie Mae's capital deficiency also was concealed because its deferred tax assets and guaranty obligations were not properly accounted for in violation of GAAP.

Since Fannie Mae was placed in conservatorship by the federal government, the price of its Series S preferred stock has declined precipitously from the $25 offering price and reached a low of $1.51/share--roughly 94% less than its offered value--on September 18, 2008.

If you are a member of this class and want to serve as lead plaintiff, you must move the Court by November 7, 2008. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Adam Plant of WDK at 1-800-695-6750 or 1-205-328-9576, or via e-mail at aplant@wdklaw.com.

About the Firm: Whatley, Drake & Kallas, LLC is a national law firm with offices in Birmingham, New York City, and Boston. The Firm's practice is concentrated on complex class action and derivative litigation, including securities, ERISA, 401k, healthcare, insurance, antitrust, mass tort and consumer litigation. The Firm also remains devoted to its longstanding representation of unions and workers throughout the United States and represents several Taft-Hartley plans.

CONTACT: Joe R. Whatley Jr. (205/328-9576)

SOURCE Whatley, Drake & Kallas, LLC