FDIC sues former top WaMu execs, alleging 'gross negligence'

[The Straight Story]

FDIC sues former top WaMu execs, alleging 'gross negligence'


The Federal Deposit Insurance Corp. filed a lawsuit Wednesday against three former top executives of Washington Mutual, accusing them of taking "extreme and historically unprecedented risks" with the failed bank's home loan portfolio.

The suit names former WaMu Chief Executive Officer Kerry Killinger, Chief Operating Officer Stephen Rotella, WaMu Home Loans President David Schneider, and Killinger and Rotella's wives, alleging they piled on the risk to boost their personal wealth.

"They focused on short term gains to increase their own compensation, with reckless disregard for WaMu's longer term safety and soundness," the FDIC wrote. "Their negligence, gross negligence and breaches of fiduciary duty caused WaMu to lose billions of dollars."

The FDIC said it brought the suit "to hold these three highly paid senior executives, who were chiefly responsible for WaMu's higher risk home lending program, accountable for the resulting losses."


http://www.komonews.com/news/local/118187134.html

[Kadie]

1. Good!

Will we see more of this?

[tabatha]

2. About time!

Maybe the blame will be placed where it belongs.

I am so glad I had my loan refinanced by another company.

[xchrom]

3. recommend

[DirkGently]

4. A suit in the right direction.

[jtrockville]

5. Maybe now they'll jump?

[The Backlash Cometh]

6. So overdue!

[Duwamish]

7. I'm so glad to hear this...

I'd love to see them in 'cuffs but they'll cut a deal, pay a small fine, and feel no remorse. Pardon my cynicsm but I come by it honestly.

[malaise]

8. Justice is coming

Rec

[eilen]

9. So, when do they go to jail?

Words and little fines aren't going to cut it.

[susanr516]

10. I've been hoping the FDIC would step in

I hope it starts filing a bunch of criminal charges against these bankster CEOs. I know there are a lot of criminal investigations going on (I have a relative who works at FDIC.)

[SOS]

11. Richly deserved

Wamu's behavior during the bubble was outrageous.

[gratuitous]

12. Oooh, a lawsuit!

Since the money's probably long gone, either spent or safely squirreled away where nobody can find it, I'm sure that Killinger and Rotella are just shaking in their Guccis. I wonder why they're not at risk for spending a little quality time at the Graybar Hotel?

[Snoutport]

13. fannie mae and freddie mac CEOs got it too didn't they?

this would be like the Obama administration....they just don't talk about stuff and then suddenlyi it is just sort of done. hmmmmmmm.... maybe a bunch more coming?

[Change Happens]

14. Too bad it is not fraud!