Former IndyMac Heads to Pay Shareholders $6.5M Settlement
Former IndyMac Heads to Pay Shareholders $6.5M Settlement
The leaders of IndyMac Bancorp have agreed to pay $6.5 million to settle a shareholder class-action lawsuit connected to the collapse of the mortgage lender in July 2008.
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. The Federal Deposit Insurance Corp. took over the Pasadena, Calif.-based company after its collapse.
The shareholders’ motion for preliminary approval, filed July 2 in the U.S. District Court for the Central District of California, calls the proposed settlement “a reasonable resolution” to the case, as it eliminates the chance that shareholders would recover nothing.
In the lawsuit, shareholders accused IndyMac officials of making statements that concealed the true extent of the company’s deteriorating financial situation, as well as its growing exposure to regulatory action. The settlement amount is to be paid in exchange for the dismissal of such claims.
Source: "IndyMac Leaders Agree to Settle Shareholder Class-Action Litigation for $6.5 Million," Washington Post (June 8, 2012).
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