Washington Mutual Inc.'s former executives, underwriters, and auditor reached a $208.5 million settlement in a class-action lawsuit by investors.[IMAGE]
The Seattle-based institution was the largest U.S. bank to fail, and according to ""_Reuters,_"":http://uk.reuters.com/article/2011/07/01/washingtonmutual-settlement-idUKN1E75T1JK20110701 the settlement is one of the largest resulting from the financial crisis.
Only Countrywide Financial Corp with a $624 million settlement and Merrill Lynch with $475 million settlement settled for more than Washington Mutual has, _Reuters_ reports.[COLUMN_BREAK]
The class-action suit combined more than 20 cases in which investors claimed the bank misrepresented its financial condition when its loans began to fail after careless underwriting and inflated appraisals.
The settlement calls for $105 million from the bank's directors and officers, $85 million from several underwriters, and $18.5 million from Deloitte & Touche LLP, Washington Mutual's auditor.
Washington Mutual filed bankruptcy in 2008 after being taken over by the FDIC and sold to ""JPMorgan Chase"":https://www.chase.com/ for $1.9 billion.
Washington Mutual's executives are still in the midst of legal action enacted by the FDIC.
The two parties have been unable to reach a settlement, and executives are now arguing that the case be dismissed under the ""business judgment"" rule, which protects business decisions made in good faith.
A hearing is not likely to take place before September or October, according to the _Seattle Times_.