F.D.I.C. Sues Chief Executive in Washington Mutual Collapse

[ProSense]

F.D.I.C. Sues Chief Executive in Washington Mutual Collapse

By ERIC DASH

The Federal Deposit Insurance Corporation filed a civil complaint on Thursday against the longtime chief executive of Washington Mutual and two top lieutenants, accusing them of reckless lending practices that led to the collapse of the nation’s largest savings and loan.

In a complaint filed Thursday in Federal District Court in Seattle, regulators accused the former chief executive, Kerry K. Killinger, of leading Washington Mutual on a “lending spree” even though he knew that the real estate market was in a bubble. The suit also said that he failed to put in place the proper risk management systems and controls.

Two other executives, David C. Schneider, WaMu’s president, and Stephen J. Rotella, were named in the suit and accused of recklessly assisting Mr. Killinger in carrying out the strategy.

The suit would be the first legal action against the chief executive of a major bank for his role during the financial crisis. It comes as regulators are under intense pressure to hold executives accountable for practices that led to the collapse.

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[williesgirl]

1. So where's the CRIMINAL complaint? Took forever for this one.