The FDIC is suing three former WaMu executives for their role in the bank’s failure. The directors of the board, according to the Wall Street Journal, already settled for $125 million. More details:
The Federal Deposit Insurance Corp. sued three former executives of the failed Washington Mutual Bank, along with two of their wives, in a lawsuit filed on Wednesday.
The FDIC is seeking $900 million in damages for alleged gross negligence and other failures by the former executives in the run up to WaMu’s collapse in September 2008…
The former WaMu executives charged by the FDIC are Kerry Killinger, the former chief executive officer, and his wife, Linda; Stephen Rotella, a former president and chief operating officer, and his wife Esther; and David Schneider, the former president of home loans for WaMu, who now works for WaMu’s new owner, J.P. Morgan Chase & Co….
The WaMu suit is the FDIC’s highest-profile action against bank executives for alleged wrongdoing during the financial crisis. As of March 15, the FDIC had authorized the filing of lawsuits seeking to recover $3.57 billion from 158 officers and directors at failed banks.
Killinger and Rotella issued strongly-worded objections to the litigation. I can’t wait to get my hands on a copy (it does not appear to be available through the FDIC site).