Tuesday, July 10, 2012

IndyMac leaders agree to settle class-action suit

Some leaders of the failed IndyMac Bancorp have agreed to settle a shareholder class-action lawsuit for $6.5 million.

The lawsuit names former IndyMac CEO Michael W. Perry and Chief Financial Officer Scott Keys as defendants.

IndyMac collapsed in July 2008, and the Federal Deposit Insurance Corp. took over the Pasadena, Calif.-based mortgage lender. IndyMac was one of the largest mortgage originators in the United States, and its collapse marked one of the biggest bank failures in U.S. history.

Plaintiffs in the lawsuit represent shareholders who bought the mortgage lender's stock from March 1, 2007 to May 12, 2008. The lawsuit accused the defendants of making statements that concealed the true extent of IndyMac's deteriorating capital and liquidity as well as its growing exposure to regulatory action, among other claims.

The payment will be made in exchange for a dismissal of the claims against the defendant, according to federal court papers filed last week.

The proposed settlement represents "a reasonable resolution" for the case and eliminates the chance that shareholders may recover nothing, according to a shareholders' motion for preliminary approval filed July 2 in the U.S. District Court for the Central District of California, Western Division.

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Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-07-08-US-IndyMac-Lawsuit-Settlement/id-769f28e1032a41849b353792f2c2912b

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