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The Wall Street Journalreports that Justice Department lawyers want a Court of Federal Claims judge to issue a temporary stay on a lawsuit from Fannie Mae and Freddie Mac investors against the government as a similar U.S. district court case progresses.

The district court dismissed several investor lawsuits in September, and Justice lawyers want a temporary stay on the Federal Claims case while investors appeal. The investors are seeking control over profits from the government-sponsored enterprises, currently going to the Treasury Department while they are under conservatorship.

"If Judge [Margaret] Sweeney doesn't stay the litigation, the government says it will move to dismiss the case on grounds the District Court's decision legally bars the investors from bringing such a similar case in the Court of Claims," the article says.

In related news, Fannie Mae reached a $170 million settlement last week over claims that the housing finance giant misled shareholders about its finances, risk management and mortgage exposure before its government takeover in 2008.

Shareholders in the company alleged that Fannie Mae "defrauded shareholders and inflated its stock by false and misleading statements about its internal controls, capitalization, accounting, and exposure to subprime and low-documentation ‘Alt-A' mortgages," Reuters reported on Friday.

The article noted that the settlement averted possible "numerous and substantial risks" of continuing the lawsuit after the other suit against Freddie Mac was dropped last year.

Fannie Mae and Freddie Mac, regulated by the Federal Housing Finance Agency, have been under FHFA conservatorship since 2008.