WaMu Ex-Officials Settle FDIC Lawsuit
Three former executives of Washington Mutual Inc. have agreed to settle a civil lawsuit stemming from the biggest-ever U.S. bank failure for less than 10% of the $900 million that was sought by federal regulators, according to people familiar with the situation.
The deal would mark the latest setback for the government in a high-profile, financial-crisis-related case. The lion's share of the payout, which is expected to
total less than $75 million, would come from insurers and the bank's estate—not from the pockets of the former executives.
The FDIC, in a lawsuit filed in federal court in Seattle in March, accused former Chief Executive Kerry Killinger, ex-President Stephen Rotella, and David Schneider, the bank's former home-loans president, of taking gambles that sparked the thrift's collapse in 2008. The agency also accused the three, along with the wives of Messrs. Killinger and Rotella, of seeking to shield cash and their houses from legal claims. The three former executives received a total of $95 million in compensation between 2005 and 2008, the FDIC said in its lawsuit.
The defendants didn't admit or deny any wrongdoing in settling the suit.
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