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Bank Failure Fallout
Tue February 22, 2011
WaMu execs face federal lawsuit
Several former Washington Mutual executives have been notified by the federal government that they'll be sued over their role in the collapse of the Seattle-based bank.
The Puget Sound Business Journal reports that sources familiar with the suit say the Federal Deposit Insurance Corporation intends to seek more than a billion dollars in damages.
To be named in the suit are:
- Kerry Killinger, former WaMu CEO
- Steve Rotella, former president and chief operating officer
- David Schneider, former head of the bank’s home load division
All three executives have denied wrongdoing.
WaMu’s mortgage division is the subject of a massive shareholder lawsuit, and Congressional investigators have found hundreds of documents detailing fraud inside the bank’s mortgage division.
Federal regulators seized WaMu in September 2008 and sold it to J.P. Morgan Chase. It was the largest bank failure in U.S. history.