Bloomberg News

Ex-Washington Mutual Officers Reach $64 Million FDIC Settlement

December 15, 2011

Dec. 13 (Bloomberg) -- Three former executives of Washington Mutual, Inc. have agreed to a $64 million settlement of a lawsuit brought by the Federal Deposit Insurance Corp. over the bank’s failure in September 2008, according to FDIC officials.

Former chief executive Kerry Killinger, former chief operating officer Stephen Rotella and the former top lending official David Schneider had faced claims from the FDIC that they pay $900 million.

The FDIC values the settlement at $64 million, according to the officials, who briefed reporters on the condition of anonymity today.

WaMu failed after depositors withdrew money and a years- long focus on subprime mortgages took its toll, and its holding company has since been the subject of litigation by shareholders, noteholders, officers and regulators. Its deposits, assets and certain liabilities were immediately sold to JPMorgan Chase & Co. after its regulator, the now-defunct Office of Thrift Supervision, closed the Seattle-based bank.

The settlement will be formalized in the next day and made public within a week, the officials said.

--Editors: Lawrence Roberts, Gregory Mott

To contact the reporter on this story: Carter Dougherty in Washington at cdougherty6@bloomberg.net.

To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net.


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