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Hedge funds and other investors in the bailed-out mortgage giants Fannie Mae and Freddie Mac suffered a loss in federal appeals court Tuesday, as a three-judge panel ruled that they could not sue the government for taking profits from them.

The U.S. Court of Appeals for the District of Columbia Circuit told investors, including hedge fund Perry Capital, that the 2009 stimulus law barred courts from considering their claims that Fannie and Freddie’s government caretakers broke the law. The panel also sent back to the lower court the investors’ claims that the government breached contracts.

Fannie and Freddie investors have filed a number of suits over the Obama administration’s 2012 decision to take all of the companies’ profits for the Treasury. Tuesday’s decision pertained to a case consolidating the claims of a number of investors, including major hedge funds and insurance companies. Fannie and Freddie have private shareholders, although their shares stopped being traded on the stock exchanges after the government bailed them out.

The opinion was written by Judge Patricia Millett, an Obama appointee, and Judge Douglas Ginsburg, a Reagan appointee. Judge Janice Rogers Brown, a conservative George W. Bush appointee, dissented in part.

Fannie and Freddie were taken into government custody during the crisis in 2008 and received about $189 billion in taxpayer funds. Subsequently, they returned to profitability and have returned $256 billion to the Treasury. After the Obama Treasury amended the terms of the bailout in 2012 to take all profits, rather than a fixed dividend, investors sued.

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