Washington Mutual Class Action Suit Settled
July 4 2011, 3:52 pm
Washington Mutual Inc. (WMI/WaMu) and other defendants have settled to pay $208.5 million in a class action lawsuit that was derived from WaMu’s collapse in 2008.
Washington Mutual Inc., a savings bank holding company that was created in 1898, had collapsed in 2008. The company’s fall has been attributed to a focus on lower-income borrowers and “reckless lending” by the bank’s head, Kerry Killinger. As one of the premier banks in mortgage loans, WaMu also suffered greatly in the housing market downturn in 2007.
Eventually, federal regulators seized WaMu’s main bank based in Seattle, and sold its assets to JP Morgan Chase & Co. for $1.8 billion. It is considered to be the largest bank failure in US history.
In March 2011, the F.D.I.C. sued Killinger and two top lieutenants for reckless lending prior to the bank’s collapse in 2008.The plaintiffs include large pension funds and individual investigators, accusing WaMu of securities fraud.
According to an article by Alex Veiga of the Associated Press, the lead plaintiff in this case, Ontario Teachers’ Pension Plan Board, helped to outline the details of the agreement with the US district court in Seattle. In this agreement, Washington Mutual is to pay $105 million, Goldman, Sachs & Co. to pay $85 million, and Deloitte & Touche LLP to pay $18.5 million. In exchange, the plaintiffs will dismiss all complaints against the bank and its co-defendants.
Also included in this deal is that WMI and its co-defendants do not admit to any wrongdoing.
In cases of class action lawsuits, companies or investors often hire external services to help in ensuring that shareholders receive the money they deserve and that the company is operating as it should. Companies like Goal Group provide class action services in companies where there has been proven mis-management and/or unlawful behaviour.
