The Federal Deposit Insurance Corp (FDIC) has sent letters to former execs of collapsed bank, Washington Mutual, warning them of possible legal action, the Wall Street Journal reports.The FDIC has reportedly talked, in private, about potential damages of $1 billion in a lawsuit against the failed lender, which could be decided and announced in the next month.
According to the WSJ, “such letters… can be a precursor to a lawsuit.”
There hasn’t been any word on which executives would be charged in any legal action.
When WaMu imploded, Kerry Killinger was the bank’s CEO. He and other execs have already denied wrongdoing in the nation’s largest-ever bank failure, but legislators accused WaMu chieftains of having “tolerated fraudulent lending, knowingly dumped problem loans on investors and did too little, too late to stem problems once they threatened to sink the thrift” back in 2010.
The FDIC sold WaMu’s assets to JP Morgan in 2008 for $1.8 billion.
According to the WSJ,
The potential action against executives of WaMu would be the most prominent attempt to date by the FDIC to bring cases against bank executives for alleged wrongdoing during the crisis.
So far, the FDIC has filed civil lawsuits against former officers and directors of just four of the more than 300 banks that have failed since 2008.