The government's pursuit of Kerry Killinger is apparently over except for the official champagne uncorking - by Killinger. The feds have already ended a fruitless criminal probe of the man behind America's biggest bank failure. Now a Seattle federal judge says a settlement is pending in the government's civil, and likely final, action against the former Washington Mutual CEO.
According to U.S. District Court Judge Marsha Pechman, she has been notified of a pending settlement between the Federal Deposit Insurance Corporation and Killinger, along with his WaMu co-defendants Stephen Rotella and David Schneider.
Pechman has now terminated all pending motions and deadlines in the case and awaits word of the final agreement. No terms have been released and Killinger's attorney Barry Kaplan yesterday said "We have no comment at this time."
In a lawsuit filed in March, the FDIC sought $900 million in damages from Killinger and the others, contending they were, at the least, negligent in their failed operation of WaMu.
The settlement follows an October agreement by Killinger and others to pay $41.5 million to end a seven-year-old class-action case brought by stockholders - with the executives' insurance company paying the tab.
Stockholders claimed the executives misrepresented--and failed to disclose material facts--regarding the profitability of WaMu's mortgage-lending business, leading to "artificially inflated" stock prices.
Earlier this year, another group of stockholders agreed to accept a $208.5 million settlement, about half of it debited to Killinger and the execs but, again, actually paid for by insurers.
Killinger and the others of course paid no price as a result the criminal investigation by the Justice Department. U. S. Attorney Jenny Durken said that, despite a lengthy and costly investigation, the feds could find no wrongdoing in the massive 2008 WaMu failure.
That year, Killinger took home $25.1 million in compensation, including a $15.3 million golden parachute, before he was fired. Over the previous five years, as the bank began its slide to oblivion, he earned $103 million in cash, stock, and options.
As CBS's 60 Minutes reported Sunday, the Justice Dept. is so far giving a lot of lip service to bank investigations while failing to prosecute execs from big mortgage lenders such as WaMu and Countrywide Financial.
Still, Lanny Breuer, the head of Justice's criminal division, says "the American people...should have confidence that this is a department that's working hard and we're gonna keep working hard, so stay tuned."