SHAHROKHINIA v. FEDERAL NATIONAL MORTGAGE W

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Case 1:05-cv-00620-RJL Document 7 F i l e d 04/15/2005 Page 1 o f 1 1

UNITED STATES DISTRICT COURTDISTRICT OF COLUMBIA

SASSAN SHAHROKHINIA, 1167 8 ChippenhamWay, San D i e g o , CA 92128, I n d i v i d u a l l y and OnB e h a l f o f A l l Others S i m i l a r l y S i t u a t e d , CLASS ACTION COMPLAINT

P l a i n t i f f ,v s .

FEDERAL NATIONAL MORTGAGEASSOCIATION ( Operating as "FANNIE MAE"),3900 Wisconsin Avenue , NW Washington, DC2 0 0 1 6 , FRANKLIN RAINES , c / o F e d e r a lN a t i o n a l Mortgage A s s o c i a t i o n , 3900 WisconsinAvenue , NW Washington , DC 2 0 0 1 6 , TIMOTHYHOWARD , c / o F e d e r a l N a t i o n a l MortgageA s s o c i a t i o n , 3900 Wisconsin Avenue, NWWashington, DC 2 0 0 1 6 , an d LEANNE G .SPENCER , c / o F e d e r a l N a t i o n a l MortgageA s s o c i a t i o n , 3900 Wisconsin Avenue, NWWashington , DC 20016,

Defendants.

JURY TRIAL DEMANDEDCIVIL ACTION NO.:1:05cv00620

BEFORE THE HONORABLEJUDGE RICHARD J . LEON

APPLICATION FOR RELIEFFROM STIPULATED ORDER OF CONSOLIDATION '

I . OVERVIEW:For t h e reasons s e t o u t b e l o w , P l a i n t i f f s i n t h e a b o v e - s t y l e d case r e s p e c t f u l l y

a s s e r t t h a t t h e Court should n o t c o n s o l i d a t e t h i s case w i t h i n r e Fannie Mae S e c u r i t i e sL i t i g a t i o n , Consolidated C i v i l A c t i o n N o . 1 : 0 4 - c v - 0 1 6 3 9 ) .( S h a r e h o l d e r s ' Class A c t i o n ) .

Please be advised t h a t t h e P l a i n t i f f i s c o n c u r r e n t l y f i l i n g an " O b j e c t i o n t o t h e S t i p u l a t e d Order o fC o n s o l i d a t i o n " i n I n r e Fannie Mae S e c u r i t i e s L i t i g a t i o n ( C o n s o l i d a t e d C i v i l A c t i o n N o . 1 : 0 4 - c v -01639).www

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The S h a r e h o l d e r s ' Class A c t i o n i s brought on b e h a l f o f a l l those who purchasedFannie Mae common s t o c k . 2 I n c o n t r a s t , t h i s case ( O p t i o n T r a d e r s ' Class A c t i o n ) i sbrought on b e h a l f o f a d i f f e r e n t c l a s s - - a l l those who purchased c a l l o p t i o n s o r s o l d p u to p t i o n s on Fannie Mae common s t o c k . 3

P l a i n t i f f s r e s p e c t f u l l y a s s e r t t h a t c o n s o l i d a t i o n o f these cases i s unwarrantedbased o n , b u t n o t l i m i t e d t o t h e f o l l o w i n g r e a s o n s :

Courts t r e a t o p t i o n t r a d e r s an d shareholders as d i f f e r e n t c l a s s e s ; Lead p l a i n t i f f s , and t h e i r counsel , i n t h e S h a r e h o l d e r s ' Class

A c t i o n , abandoned o p t i o n t r a d e r s when they d e f i n e d t h e i r c l a s s ; Option t r a d e r s w i l l s u f f e r p r e j u d i c e i f t h e cases a r e c o n s o l i d a t e d ; The P u b l i c S e c u r i t i e s L i t i g a t i o n Reform Act (PSLRA) r e q u i r e s t h e

Court t o a p p o i n t l e a d counsel f o r t h e o p t i o n t r a d e r s ; and C o o r d i n a t i o n , r a t h e r than c o n s o l i d a t i o n , i s a b e t t e r way t o a v o i d

unnecessary c o s t s and d e l a y .I I . PROCEDURAL HISTORY:

I n September 2004, Vincent V i n c i f i l e d t h e f i r s t o f s e v e r a l c l a s s a c t i o n l a w s u i t s onb e h a l f o f purchasers o f Fannie Mae s e c u r i t i e s . 4 The p l a i n t i f f s i n these a c t i o n s s t i p u l a t e dt o an o r d e r c o n s o l i d a t i n g t h e i r cases ( t h e C o n s o l i d a t i o n O r d e r ) . The C o n s o l i d a t i o nOrder p r o v i d e s t h a t :

The terms o f t h i s Order apply t o any a c t i o n h e r e i n a f t e r f i l e d i n t h i sD i s t r i c t o r t r a n s f e r r e d t o t h i s Court t h a t i n v o l v e c l a i m s on behalf o ft h e purchasers o f Fannie Mae s e c u r i t i e s and t h a t a r i s e o u t o f t h esame f a c t s and a s s e r t t h e same o r s u b s t a n t i a l l y s i m i l a r c l a i m s asa l l e g e d i n t h e [ S h a r e h o l d e r s ' Class A c t i o n ] . . . 5

2 See I n r e Fannie Mae S e c u r i t i e s L i t i g a t i o n Complaint a t 2 7 2 .3 See Shahrokhinia Complaint a t 1 4 3 .4 See V i n c i v . Federal N a t i o n a l Mortgage A s s o c i a t i o n , e t a l . ( C i v i l Case N o . 1:04-cv-01639)Complaint a t 1 .5 See C o n s o l i d a t i o n Order a t 4 .

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I n January 2005, t h e Court appointed t h e Ohio P u b l i c Employees RetirementSystem and S t a t e Teachers Retirement System o f Ohio ( c o l l e c t i v e l y r e f e r r e d t o as LeadP l a i n t i f f s ) as l e a d p l a i n t i f f s f o r t h e S h a r e h o l d e r s ' Class A c t i o n . Two months l a t e r , LeadP l a i n t i f f s f i l e d a " C o n s o l i d a t e d Class A c t i o n Complaint f o r V i o l a t i o n s o f F e d e r a lS e c u r i t i e s Laws" ( C o n s o l i d a t e d C o m p l a i n t ) . U n l i k e t he v a r i o u s u n d e r l y i n g c o m p l a i n t s ,t h e Consolidated Complaint seeks r e l i e f s o l e l y f o r " a c l a s s comprised o f a l l those whopurchased Fannie Mae common stock (emphasis a d d e d ) . s 6

P l a i n t i f f Sassan Shahrokhinia d i d n o t purchase Fannie Mae common s t o c k , hes o l d p u t o p t i o n s on Fannie Mae's common s t o c k . As a r e s u l t , he does n o t q u a l i f y as ac l a s s member o f t h e c l a s s i n t h e Consolidated C o m p l a i n t . Because Lead P l a i n t i f f s i n t h eS h a r e h o l d e r s ' Class A c t i o n have chosen t o exclude o p t i o n t r a d e r s l i k e him from t h ec l a s s , he has f i l e d Option T r a d e r s ' Class A c t i o n " on b e h a l f o f a c l a s s comprised o f a l lthose who purchased c a l l o p t i o n s o r s o l d p u t o p t i o n s on Fannie Mae common s t o c k . , 7On A p r i l 7 , Shahrokhinia r e c e i v e d a copy o f t h e Consolidated Order i n d i c a t i n g h i s casewa s c o n s o l i d a t e d w i t h t h e Shareholders ' Class A c t i o n . Shahrokhinia has now t i m e l yf i l e d t h i s A p p l i c a t i o n f o r R e l i e f from S t i p u l a t e d Order o f C o n s o l i d a t i o n .

As f u r t h e r discussed b e l o w , we urge t h e Court t o g r a n t S h a h r o k h i n i a ' sA p p l i c a t i o n f o r R e l i e f from S t i p u l a t e d Order o f C o n s o l i d a t i o n .

I l l . COURTS TREAT OPTION TRADERS AND COMMON SHAREHOLDERS ASDIFFERENT CLASSES:Options t r a d e r s do n o t stand i n t h e same shoes as s h a r e h o l d e r s . While o p t i o n

t r a d e r s and shareholders b o t h have an i n t e r e s t i n p r o v i n g t h e same a l l e g a t i o n s a g a i n s t

6 Se e I n r e Fannie Mae S e c u r i t i e s L i t i g a t i o n Consolidated Complaint a t 2 7 2 .Se e Shahrokhinia Complaint a t 1 4 3 .

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defendants , they have d i f f e r e n t and competing i n t e r e s t s i n t h e outcome o f t h e l i t i g a t i o n .Put b l u n t l y , Fannie Mae shareholders and o p t i o n t r a d e r s a r e competing w i t h each o t h e rf o r t h e h i g h e s t p o s s i b l e recovery . Every penny o p t i o n t r a d e r s r e c o v e r i s one l e s s pennya v a i l a b l e f o r s h a r e h o l d e r s .

Based on t h i s i n h e r e n t c o n f l i c t o f i n t e r e s t , a number o f c o u r t s have t r e a t e d o p t i o nt r a d e r s an d shareholders as separate and d i s t i n c t c l a s s e s when b o t h b r i n g a s e c u r i t i e s -f r a u d c l a s s a c t i o n a g a i n s t t h e same d e f e n d a n t .

For example, i n i n r e Green Tree F i n a n c i a l C o r p . Options L i t i g a t i o n , 8 n e a r l y 30s e c u r i t i e s - f r a u d c l a s s a c t i o n s were f i l e d . "The cases were subsequently c o n s o l i d a t e di n t o two separate p u t a t i v e c l a s s a c t i o n s , one c o n s i s t i n g o f purchasers o f Green Trees t o c k . . . ( t h e ' s t o c k ' a c t i o n ) and the other consisting of traders of options on G reenTree stock . . . ( the `options action ) (emphasis a d d e d ) . " 9

S i m i l a r l y , i n i n r e A r a k i s Energy C o r p . S e c . L i t i g . 1 0 , s t o c k purchasers sued A r a k i sand i t s o f f i c e r s an d d i r e c t o r s , accusing them o f d i s s e m i n a t i n g f a l s e i n f o r m a t i o n t oa r t i f i c i a l l y i n f l a t e t h e p r i c e o f A r a k i s ' s t o c k . The c o u r t c o n s o l i d a t e d 22 i n d i v i d u a l a c t i o n sand c e r t i f i e d a c l a s s o f i n d i v i d u a l s who purchased A r a k i s s t o c k d u r i n g t h e c l a s s p e r i o d .Three years l a t e r , s e v e r a l o p t i o n s t r a d e r s sought t o c e r t i f y a new c l a s s based on t h esame c l a i m s . The c o u r t granted t h e r e q u e s t .

L i k e t h e c o u r t s i n Green Tree and A r a k i s , t h i s Court should t r e a t Fannie Maeo p t i o n s t r a d e r s as a separate c l a s s than those who purchased Fannie Mae commons t o c k .

8 I n r e Green Tree F i n a n c i a l C o r p . Options L i t i g a t i o n 2 0 0 2 U . S . D i s t . LEXIS 13986 ( M i n n . 2 0 0 2 ) .9 I d . a t p . 2 .t o I n r e A r a k i s Energy C o r p . S e c . L i t i g . 1999 U . S . D i s t . L EX IS 2 2 2 4 6 ( E . D . NY 1 9 9 9 ) .

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I V . OPTION TRADERS HAVE BEEN EXCLUDED BY SHAREHOLDERS CLASSACTION:Although none o f t h e i n d i v i d u a l p l a i n t i f f s i n t h e S h a r e h o l d e r s ' Class A c t i o n were

o p t i o n s t r a d e r s , a l l o f t h e i r i n d i v i d u a l complaints were brought on b e h a l f o f t h epurchasers o f Fannie Mae s e c u r i t i e s . Under t h e S e c u r i t i e s an d Exchange A c t , t h e term" s e c u r i t i e s " means b o t h shareholders and o p t i o n s t r a d e r s . " Thus, o p t i o n s t r a d e r s wouldarguably be i n c l u d e d under an a c t i o n brought under t h e A c t . However, as t h eConsolidated Complaint r e f l e c t s , Lead P l a i n t i f f s have abandoned o p t i o n t r a d e r s andhave l i m i t e d t h e c l a s s t o common shareholders o n l y .

The consequences o f Lead P l a i n t i f f s ' e x c l u s i o n o f o p t i o n t r a d e r s from t h eConsolidated Complaint's c l a s s d e f i n i t i o n a r e s i g n i f i c a n t . I t i s n o t h a r d t o p i c t u r e as c e n a r i o down t h e road where Lead P l a i n t i f f s o r defendants argue o p t i o n s t r a d e r sshould n o t share i n any recovery i n t h e S h a r e h o l d e r s ' Class A c t i o n based on t h e f a c tt h a t ( 1 ) they a r e n o t p a r t o f t h e d e f i n e d c l a s s , and / o r ( 2 ) t h e i n t e r e s t s o f some o p t i o n st r a d e r s a r e opposed t o those o f common s h a r e h o l d e r s .

Moreover, Lead P l a i n t i f f s ' e x c l u s i o n o f o p t i o n t r a d e r s p r e v e n t s them from nowi n c l u d i n g o p t i o n s t r a d e r s i n t h e S h a r e h o l d e r s ' Class A c t i o n . A p a r t y cannot seek t oi n c l u d e a group i n t he c l a s s when i t has p r e v i o u s l y taken an i n c o n s i s t e n t p o s i t i o n i n t h el i t i g a t i o n w i t h r e g a r d t o t h e d e f i n i t i o n o f t h e c l a s s . 1 2 By n o t i n c l u d i n g o p t i o n t r a d e r s i n t h eConsolidated C o m p l a i n t ' s d e f i n i t i o n o f t h e c l a s s , Lead P l a i n t i f f s cannot now say theyshould p r o p e r l y be i n c l u d e d w i t h i n t h e c l a s s .

F i n a l l y , Lead P l a i n t i f f s ' omission o f o p t i o n t r a d e r s from t h e S h a r e h o l d e r s ' ClassA c t i o n cannot be excused as merely i n a r t f u l p l e a d i n g . An adequately d e f i n e d c l a s s must

" 15 U.S.C. 7 8 c (a ) (1 ) p r o v i d e s : "The term s e c u r i t y means any . . . p u t , c a l l , s t r a d d l e , o p t i o n . .1 2 S e e W. A l t o n Jones Foundation v . Chevron U . S . A . , I n c . 97 F . 3 d 29 ( 2 d C i r . 1996) (Defendantsc o u l d n o t argue group wa s i n c l u d e d i n c l a s s s e t t l e m e n t when they had p r e v i o u s l y argued groupwa s n o t i n c l u d e d i n t h e c l a s s ) .

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d e l i n e a t e t h e c l a s s w i t h a " f a i r degree o f s p e c i f i c i t y o r some p r e c i s i o n . 0 3 H e r e , LeadP l a i n t i f f s have c l e a r l y d e f i n e d t h e c l a s s t o exclude o p t i o n t r a d e r s , e x p r e s s l y d e s c r i b i n gt h e c l a s s as " t h o s e who purchased Fannie Mae common s t o c k . 04

The Option T r a d e r s ' Class A c t i o n should n o t be c o n s o l i d a t e d w i t h t h eShareholders Class A c t i o n because o p t i o n s t r a d e r s were i n t e n t i o n a l l y abandoned fromt h a t c l a s s ' d e f i n i t i o n .

V . OPTION HOLDERS WILL SUFFER PREJUDICE I F THE CASES ARECONSOLIDATEDRule 4 2 o f t h e F e d e r a l Rules o f C i v i l Procedure empowers a t r i a l judge t o

c o n s o l i d a t e a c t i o n s f o r t r i a l when t h e r e a r e common q u e s t i o n s o f law o r f a c t t o a v o i dunnecessary c o s t s o r d e l a y . But c o n s i d e r a t i o n s o f convenience and economy must y i e l dt o a paramount concern f o r a f a i r and i m p a r t i a l t r i a l . 1 5 C o n s o l i d a t i o n i s i n a p p r o p r i a t ewhen i t w i l l adversely a f f e c t t h e r i g h t s o f t h e p a r t i e s , i n c l u d i n g where "management o ft h e c o n s o l i d a t e d case i s vested i n l e a d c o u n s e l , whose e f f o r t s a r e l i k e l y t o f o c u s on t h ei n t e r e s t s o f t h e m a j o r i t y , thereby d e p r i v i n g t h e m i n o r i t y o f f u l l d i s c o v e r y andp r e p a r a t i o n . " ' s

H e r e , we r e s p e c t f u l l y a s s e r t t h a t Fannie Mae o p t i o n s t r a d e r s w i l l c l e a r l y s u f f e rsevere p r e j u d i c e i f t h e i r case i s c o n s o l i d a t e d w i t h t h e S h a r e h o l d e r s ' Class A c t i o n .

As mentioned above, Lead P l a i n t i f f s e x p r e s s l y d e f i n e d t h e c l a s s as " t h o s e wh opurchased Fannie Mae common s t o c k , " " e f f e c t i v e l y abandoning Fannie Mae o p t i o n s

1 3 7 Newberg on Class Actions ( 4 t h E d . ) Shareholder & D e r i v a t i v e S u i t s , 2 2 : 7 6 , p . 3 3 3 .1 4 See Consolidated Complaint a t 2 7 2 .1 5 Johnson v . Celotex C o r p . 89 9 F . 2 d 1 2 8 1 , 1285 ( 2 n d C i r . 1 9 9 0 ) .1 6 8 Moore's Federal P r a c t i c e ( 3 d E d . 2004) C o n s o l i d a t i o n : Separate T r i a l s , 4 2 . 1 0 [ 6 ] [ a ] , p . 42-2 1 .

1 7 Se e Consolidated Complaint a t 2 7 2 .

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Case 1 : 0 5 - c v - 0 0 6 2 0 - R J L Document 7 F i l e d 0 4 / 1 5 / 2 0 0 5 Page 8 o f 1 1

V I I . RATHER THAN CONSOLIDATING THESE CASES, THE COURT SHOULDCOORDINATE THEM FOR PRETRIAL LITIGATION PURPOSESI n o r d e r t o a v o i d waste o f t i m e an d money, c o n f u s i o n , an d burden on t h e c o u r t ,

t h e F e d e r a l Manual f o r Complex L i t i g a t i o n suggests t h a t d i s t r i c t c o u r t s a p p o i n t l i a i s o ncounsel t o c o o r d i n a t e p r e t r i a l a c t i v i t i e s i n complex cases i n v o l v i n g m u l t i p l e p a r t i e s . 1 9U n l i k e c o n s o l i d a t i o n , c o o r d i n a t i o n achieves " e f f i c i e n c y and economy w i t h o u tj e o p a r d i z i n g f a i r n e s s t o t h e p a r t i e s . s 2

As discussed above, c o n s o l i d a t i n g t h e Option T r a d e r s ' Class A c t i o n w i t h t h eS h a r e h o l d e r s ' Class A c t i o n w i l l r e s u l t i n p r e j u d i c e t o Fannie Mae o p t i o n t r a d e r s . Basedon t h e f o r e g o i n g , Shahrokhinia r e s p e c t f u l l y urges t h a t t h i s Court should c o o r d i n a t er a t h e r than c o n s o l i d a t e these a c t i o n s , and a p p o i n t a l i a i s o n counsel from each case t oc o o r d i n a t e d i s c o v e r y , law and motion p r a c t i c e , s e t t l e m e n t n e g o t i a t i o n s , and any o t h e rp r e t r i a l a c t i v i t i e s . Through t h e c o o r d i n a t i o n , r a t h e r than c o n s o l i d a t i o n o f these a c t i o n s , i tour c l i e n t ' s s i n c e r e b e l i e f t h a t t h e g o a l s o f j u d i c i a l economy w i l l be served an d t h ep a r t i e s ' c o n f l i c t i n g i n t e r e s t s w i l l n o t be unduly p r e j u d i c e d .V I I I . CONCLUSION

Fannie Mae o p t i o n s t r a d e r s a r e n o t i n c l u d e d i n t h e S h a r e h o l d e r s ' Class A c t i o n ' sd e f i n i t i o n o f t h e c l a s s . Nor should they be s i n c e t h e y s t a n d i n d i f f e r e n t shoes t h a nFannie Mae's shareholders and w i l l s u f f e r p r e j u d i c e i f they a r e i n c l u d e d i n t he C l a s s .Thus, t h e Court should n o t c o n s o l i d a t e t h i s case w i t h t h e S h a r e h o l d e r s ' Class A c t i o n ;b u t i n s t e a d c o o r d i n a t e t h e two a c t i o n s f o r a l l p r e - t r i a l purposes.

1 9 Manual f o r Complex L i t i g a t i o n , Fourth ( F e d e r a l J u d i c i a l Center 2004) C o o r d i n a t i o n i n M u l t i p a r t yL i t i g a t i o n - L e a d / L i a i s o n Counsel and Committees, 1 0 . 2 2 , p . 2 4 .2 0 I d . a t 2 0 . 2 2 1 , p . 2 5 .

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Dated : A p r i l 1 5 , 2 0 0 5LAW OFFICE OF FRANK J . JOHNSON

Frank J . Johnson (CA Bar # 174882)(Admitted Pr o Hac V i c e on A p r i l 1 2 , 2005)

B r e t t M. Weaver (CA Bar # 204715)(Admitted Pr o Hac V i c e on A p r i l 1 2 , 2005)

L aw O f f i c e o f Frank J . Johnson4 0 2 W. Broadway, 2 7 t h F l o o r

San D i e g o , CA 92101Telephone: ( 6 1 9 ) 230-0063

F a c s i m i l e : ( 6 1 9 ) 230-1839Local Counsel

MARTIN LILES, PLLC

B y :Robert W. L i l e s (DC Bar # 473876)

1054 3 1 s t S t r e e t , N.W.S u i t e 4 1 5

Washington, DC 2 0 0 0 7Telephone: ( 2 0 2 ) 965-3060

F a c s i m i l e : ( 2 0 2 ) 965-3063E - m a i l : r l i l e s @ m a r t y n l i l e s . c o m

Attorneys f o r P l a i n t i f f

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CERTIFICATE OF SERVICEI c e r t i f y t h a t on A p r i l 1 5 , 2005, I e l e c t r o n i c a l l y f i l e d t h e f o r e g o i n g w i t h t h e C l e r k o f Courtu s i n g t he CM/ECF system, which w i l l send n o t i f i c a t i o n o f such f i l i n g t o t h e f o l l o w i n gcounsel o f r e c o r d i n t h i s m a t t e r who a r e r e g i s t e r e d on t h e CM/ECF. S e r v i c e wa sac complished on any o f t h e f o l l o w i n g counsel n o t r e gi s t e r e d through t h e CM/ECFsystem v i a r e g u l a r U . S . m a i l on t h e 1 5 t h day o f A p r i l 2005.John H . B e i s n e r , E s q .J e f f r e y W. K i l d u f f , E s q .Kimberly A . Newman, E s q .Michael J . Walsh, J r . , E s q .O'Melveny & Myers L L P1625 Eye S t r e e t , N.W.Washington, DC 2 0 0 0 6- a n d -Seth AronsonO'Melveny & Myers L L P4 0 0 South Hopr S t r e e t , 1 5 t h F l o o rLos Angeles, CA 9007 1-28 99Counsel f o r Defendant Fannie MaeKevin M . Downey, E s q .Joseph M . T e r r y , E s q .W i l l i a m s & Connolly L L P725 T w e l f t h S t r e e t , N.W.Washington , DC 20005-5091Counsel f o r Defendant Franklin D . RainesSteven M . Sal kyE r i n D e l i n s k yZuckerman Spaeder L L P1201 Connecticut A v e . , N.W.1 2 t h F l o o rWashington, DC 20036-2638Counsel f o r Defendant J . Timothy HowardDavid S . K r a k o f f , E s q .Mark W. Ryan, E s q .Mayer, Brown, Rowe & Maw L L P1909 K S t r e e t , N.W.Washington, DC 20006-1101Counsel f o r Defendant Leanne G . Spencer

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Case 1:05-cv-00620-RJL Document 7 F i l e d 04/15/2005 Page 1 1 o f 1 1

Local CounselMARTIN LILES, PLLC

VZ A ' U ,B y :Robert W. L i l e s (DC Bar # 473876)

1054 3 1 s t S t r e e t , N.W.S u i t e 4 1 5

Washington, DC 2 0 0 0 7Telephone: ( 2 0 2 ) 965-3060

F a c s i m i l e : ( 2 0 2 ) 965-3063E - m a i l : r l i l e s @ m a r t y n l i l e s . c o m

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Case 1:05-cv-00620-RJL Document 7 - 2 F i l e d 04/15/2005 Page 1 o f 3

UNITED STATES DISTRICT COURTDISTRICT OF COLUMBIA

SASSAN SHAHROKHINIA, 11678 ChippenhamWay, San D i e g o , CA 92128, I n d i v i d u a l l y and OnB e h a l f o f A l l Others S i m i l a r l y S i t u a t e d ,

CLASS ACTION COMPLAINT

JURY TRIAL DEMANDEDP l a i n t i f f ,

CIVIL ACTION NO.:1:05cv00620v s .

FEDERAL NATIONAL MORTGAGEASSOCIATION ( Operating as "FANNIE MAE"),3900 Wisconsin Avenue , NW Washington, DC2 0 0 1 6 , FRANKLIN RAINES , c / o F e d e r a lN a t i o n a l Mortgage A s s o c i a t i o n , 3900 WisconsinAvenue, NW Washington , DC 2 0 0 1 6 , TIMOTHYHOWARD, c / o F e d e r a l N a t i o n a l MortgageA s s o c i a t i o n , 3900 Wisconsin Avenue, NWWashington, DC 20016, an d LEANNE G .SPENCER , c / o F e d e r a l N a t i o n a l MortgageA s s o c i a t i o n , 3900 Wisconsin Avenue, NWWashington, DC 20016,

BEFORE THE HONORABLEJUDGE RICHARD J . LEON

Defendants.ORDER

Upon a p p l i c a t i o n o f p l a i n t i f f Sassan S h a h r o k h i n i a , and a f t e r good cause shown:I T I S HEREBY ORDERED THAT1 . The above - s t y l e d case i s hereby r e l i e v e d from t h e Court ' s A p r i l 7 , 2005 Orderc o n s o l i d a t i n g i t w i t h i n r e Fannie Mae S e c u r i t i e s L i t i g a t i o n ( C o n s o l i d a t e d C i v i l A c t i o n N o .1 : 0 4 - c v - 0 1 6 3 9 ) .2 . An y a c t i o n bought on b e h a l f o f those w ho t r a d e d i n o p t i o n s on Fannie Maecommon s t o c k , i n v o l v i n g s u b s t a n t i a l l y r e l a t e d q u e s t i o n s o f law and f a c t , h e r e a f t e r f i l e d i no r t r a n s f e r r e d t o t h i s C o u r t , s h a l l be c o n s o l i d a t e d w i t h t h i s case and n o t w i t h i n r e FannieMae S e c u r i t i e s L i t i g a t i o n .3 . A l l f u t u r e p l e a d i n g s i n v o l v i n g Fannie Mae o p t i o n t r a d e r s s h a l l be f i l e d under CaseN o . 1:05-cv-00620 and s h a l l have t h e f o l l o w i n g c a p t i o n : I n r e Fannie Mae Optionswww

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Traders L i t i g a t i o n , Consolidated C i v i l A c t i o n N o . 1 : 0 5 - c v - 0 0 6 2 0 . The c o n s o l i d a t i o n w i l lbe f o r a l l purposes through f i n a l judgment.4 . The C l e r k o f t h e Court s h a l l m a i n t a i n a Master Docket and case f i l e under t h eCaption " I n r e Fannie Mae Options Traders L i t i g a t i o n , Master C i v i l A c t i o n N o . 1 : 0 5 - c v -00620." A l l o r d e r s p l e a d i n g s , motions and o t h e r documents s h a l l when f i l e d anddocketed i n t h e master case f i l e , be deemed f i l e d and docketed i n each c o n s t i t u e n ta c t i o n t o t h e e x t e n t a p p l i c a b l e . When an o r d e r , p l e a d i n g , motion o r document i s f i l e dw i t h a c a p t i o n i n d i c a t i n g t ha t i t i s a p p l i c a b l e t o fewer than a l l o f these c o n s o l i d a t e da c t i o n s , t h e C l e r k s h a l l f i l e such p l e a d i n g s i n t h e Master F i l e an d n o t e such f i l i n g i n t h eMaster Docket and i n t h e docket o f each a c t i o n r e f e r r e d .5 . The terms o f t h i s Order apply t o any a c t i o n h e r e a f t e r f i l e d i n t h i s D i s t r i c t o rt r a n s f e r r e d t o t h i s Court t h a t i n v o l v e c l a i m s on b e h a l f o f those w ho t r a d e d i n o p t i o n s onFannie Mae common s t o c k an d t ha t a r i s e o u t o f t h e same f a c t s and a s s e r t t h e same o rs u b s ta n t i a l l y s i m i l a r c l a i m s as a l l e g e d i n t h i s c a s e , under t h e f o l l o w i n g p r o c e d u r e s :

a . When a case r e l a t i n g t o t h e s u b j e c t m a t t e r o f t h i s case i sh e r e a f t e r f i l e d i n o r t r a n s f e r r e d t o t h i s C o u r t , t h e C l e r k o f t h e Courts h a l l :

i . M a i l a copy o f t h i s Order t o t h e a t t o r n e y ( s ) f o r t h ep l a i n t i f f ( s ) i n t h e newly f i l e d o r t r a n s f e r r e d a c t i o n and t o t h ea t t o r n e y s f o r any new d e f e n d a n t ( s ) i n t h e newly f i l e dt r a n s f e r r e d a c t i o n ; an d

i i . M a ke an a p p r o p r i a t e n o t a t i o n i n t h e MasterDocument.

b . T h i s o r d e r w i l l a p p l y t o each such case t h a t a r i s e s o u t o f o ri s r e l a t e d t o t h e same common nucleus o f f a c t s , subsequentlyi n s t i t u t e d i n , removed t o , o r t r a n s f e r r e d t o t h i s Court u n l e s s a p a r t y

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o b j e c t i n g t o t h e c o n s o l i d a t i o n o f such case o r t o any o t h e rp r o v i s i o n o f t h i s Order f i l e d , w i t hi n ( 1 0) days a f t e r t h e d a t e uponwhich a copy o f t h i s Order i s mailed t o counsel f o r such p a r t y , ana p p l i c a t i o n f o r r e l i e f from t h i s Order o r any p r o v i s i o n h e r e i n andt h i s Court deems i t a p p r o p r i a t e t o g r a n t such a p p l i c a t i o n .c . The Court d i r e c t s counsel t o c a l l t o t h e a t t e n t i o n o f t h eC l e r k o f T h i s Court t h e f i l i n g o r t r a n s f e r o f any case t h a t mightp r o p e r l y be c o n s o l i d a t e d i n t o t h i s a c t i o n .

7 . The terms o f t h i s Order s h a l l n o t have t h e e f f e c t o f making any p e r s o n ,c o r p o r a t i o n o r o t h e r p a r t y t o any a c t i o n i n which h e , she o r i t has n o t been named,served o r added as such i n accordance w i t h t h e F e d e r a l Rules o f C i v i l Procedure.8 . The Court s h a l l a p p o i n t l i a i s o n counsel from t h i s case and l i a i s o n counsel from i nr e Fannie Mae S e c u r i t i e s L i t i g a t i o n t o c o o r d i n a t e t h e p r e t r i a l a c t i v i t i e s between t h e tw oc a s e s , i n c l u d i n g , b u t n o t l i m i t e d t o , d i s c o v e r y , law and motion p r a c t i c e , and s e t t l e m e n tn e g o t i a t i o n s . A p p l i c a t i o n s t o be appointed l i a i s o n counsel a r e due by

, 2005.1 0 . The C l e r k o f The Court s h a l l m a i l a copy o f t h i s Order t o t h e a t t o r n e y o f r e c o r d f o rLead P l a i n t i f f s i n i n r e Fannie Mae S e c u r i t i e s L i t i g a t i o n .

D a t e d : , 2005Judge Richard J . LeonU n i t e d S t a t e s D i s t r i c t Court Judge

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SHAHROKHINIA v. FEDERAL NATIONAL MORTGAGE W

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Transcript of SHAHROKHINIA v. FEDERAL NATIONAL MORTGAGE W