UPDATE: Late Monday Bloomberg corrected their story here
This is pretty bad………. From the 13F-HR footnotes on Fairholme’s SEC filing….
For purposes of this Form 13F-HR for the third quarter of 2014, the filer is not disclosing its holdings in both Federal Home Loan Mortgage Corp and Federal National Mortgage Association, because such securities are not included on the Official List of Section 13(f) (full list) securities released by the Securities and Exchange Commission ($FNMA $FNMAS).
The 13(f) list from the SEC does not list either the common or preferred shares so neither is required to be listed. For the record I also emailed the reporter and editor of the story and alerted them to the error. You’ll also note that Pershing Square, an >11% holder of the common of both GSE’s also does not list the common stock of either entity in their 13F-HR for the same reason. Now, as an 10% (or more) holder, ANY action Pershing takes regarding the common stock is immediately reportable in 13D filings…..no filing= no action. Bloomberg article:
Fairholme Exits Fannie-Freddie Common, Limits Disclosures
The investment firm opted to stop disclosing preferred stakes because U.S. Securities and Exchange Commission rules don’t require them to be listed, the firm said in today’s Form 13F filing. Fairholme’s investments in Fannie Mae and Freddie Mac were concentrated in the preferred securities, previous filings show. Investments in the firms accounted for about 15 percent of the portfolio at Berkowitz’s main Fairholme Fund, according to a July 29 letter. Investors in Fannie Mae and Freddie Mac suffered losses after losing a legal bid to force the bailed-out companies to share profits with private holders. The $7.85 billion Fairholme Fund fell 5.7 percent in the third quarter, its worst decline since 2011. “We remain steadfast in our belief that — at a minimum –- shareholders are due just compensation,” Berkowitz said in a letter to investors dated Oct. 1 about the Fannie-Freddie stake. “We will continue to pursue our legal rights.” Fannie Mae common shares lost 31 percent in the quarter to $2.69, while Freddie Mac common stock declined 32 percent to $2.64. Berkowitz’s Miami-based firm also exited a stake in Genworth Financial Inc. (GNW) in the third quarter, today’s filing shows, sidestepping a November plunge in the insurer’s shares. Fairholme owned about 1.1 million Genworth shares at the end of June. Money managers who oversee more than $100 million in equities in the U.S. must file a Form 13F within 45 days of each quarter’s end to list those stocks as well as options and convertible bonds. The filings don’t show non-U.S. securities, holdings that aren’t publicly traded, or cash.