FDIC Sues WaMu Executives, and Wives

The wives of Washington Mutual Inc.’s two top executives when the nation’s largest thrift collapsed in 2008 were accused by the Federal Deposit Insurance Corp. of illegally moving cash and houses into trusts in an effort to shield the assets from legal claims.

The allegations, made in a federal-court lawsuit filed Wednesday in Seattle, are the latest sign of how the FDIC is ratcheting up the pressure on executives and directors at financial institutions that failed during the crisis. The suit is the sixth filed by the FDIC stemming from 350 bank failures since the start of 2007.

The collapse of WaMu under a mountain of bad mortgages was the biggest bank failure in U.S. history. The suit accused former Washington Mutual Chief Executive Kerry Killinger, President and Chief Operating Officer Stephen Rotella and David Schneider, the company’s former home-loans president, of negligently going on a “lending spree, knowing that the real-estate market was in a ‘bubble.’ “

Check out the rest at the WSJ here…

Full complaint below…

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4closureFraud.org

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The Federal Deposit Insurance Corporation, As Receiver of Washington Mutual Bank v Kerry K. Killinger Stephen J. Rotella, David C. Schneider Linda C. Killinger And Esther T. Rotella