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Posts Tagged ‘Washington Mutual’

Crooks and Liars- By Susie Madrak Tuesday Apr 20, 2010 2:00pm

This is really heating up. Stay tuned for further developments as Congress is emboldened by the SEC civil fraud charges:

Washington is suddenly looking very unkind to the firm that used to be known as “Government Sachs.” Now the Senate’s Permanent Subcommittee on Investigations, led by Carl Levin, Democrat of Michigan, is planning to focus hearings scheduled for next week at least in part on Goldman Sachs’s role in the financial disaster.

Levin’s staff has uncovered new documents “that link certain actions to specific people” at Goldman, according to a senior legislative official who spoke on condition of anonymity. The official would not divulge the nature of the allegation but said that Levin believes it amounts to “another big shoe to drop on Goldman.”

Spokespeople for Levin said they were not prepared to discuss the nature of the probe, but his committee has been conducting several weeks of hearings and one is planned for April 27 on “the role of the investment banks.” “We expect to have some information tomorrow,” spokesman Bryan Thomas said Monday.

Keep in mind that a win in the SEC case is by no means a slam dunk:

To a layperson, the case against Goldman may seem clear cut. After all, investors did not know some information about the product that they might have considered vital, and they lost $1 billion in the end. But the rules that govern these kinds of transactions are not so plain.

Several experts on securities law said fraud cases like this one, which focuses on context rather than content, are generally more difficult to win, because it can be hard to persuade a jury that the missing information might have led buyers to walk away.

They added, however, that the strength of the S.E.C.’s case is impossible to gauge until the agency discloses more of the evidence it has assembled. So far it has provided only a sketch.

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WaMu sues FDIC for more than $13 billion over forced sale

Raw Story- Stephen C. Webster
Published: Saturday March 21, 2009

Washington Mutual, the bankrupt, seized and “under investigation” financial institution which saw some operations forcibly sold off to JPMorgan Chase in 2008, is suing the agency that guarantees Americans’ deposits, and that agency is running low on funds.

Washington Mutual (WaMu), formerly one of the nation’s most prestigious banks and alleged holder of over $307 billion in assets, is suing the Federal Deposit Insurance Corporation for more than $13 billion over the roll-up of its banking division into JPMorgan Chase & Co.

Washington Mutual was seized by federal regulators in Sept. 2008; the company filed for bankruptcy immediately thereafter. The ensuing investigation “one of the largest and most complex federal investigations ever undertaken in Western Washington,” a US Attorney told the Seattle Times

“In a complaint filed with the U.S. District Court for the District of Columbia, the thrift’s former parent accused the FDIC of having on January 23 made a ‘cryptic disallowance’ of its claims, prompting the lawsuit,” reported Reuters.

“It also accused the FDIC of agreeing to an unreasonably low price in arranging the a $1.9 billion sale of the banking business to JPMorgan on September 25, when regulators seized Washington Mutual and appointed the FDIC as receiver.”

“On a Friday night in September 2008, the government forced WaMu into a shotgun marriage with new owners at pennies on the dollar. The FDIC seized the bank and then sold it to JPMorgan Chase for $1.9 billion,” reported MSNBC.

MORE HERE

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