Washington Mutual investors to receive US$208 mil. settlement

The bank leaders, among them former WaMu chairman Kerry Killinger, ex-chief operating officer Stephen Rotella and the company's former home loans president David Schneider, will pay a total of approximately US$105 million, said the document presented Thursday at a federal court in Seattle.

According to the preliminary agreement, investment banks and brokerages with ties to WaMu — including Goldman Sachs, Morgan Stanley, Credit Suisse, UBS and Deutsche Bank — will contribute US$85 million. The auditing firm Deloitte & Touche will pay US$18.5 million.

In exchange, the plaintiffs, led by Canada's Ontario Teachers Pension Plan board, agreed to withdraw their complaint made in an attempt to recover some of the hundreds of millions of dollars of losses they blamed on the bank's misleading and false claims.

On Sept. 25, 2008, the Federal Deposit Insurance Corporation seized WaMu's flagship bank in Seattle and facilitated its sale to JPMorgan Chase for US$1.9 billion.

JPMorgan took over the assets and liabilities of the two banking subsidiaries of the group, but the deal excluded the capital (with a market value of US$2.9 billion) and the debt supported by the holding company (US$14.4 billion).

The settlement agreement is still subject to court approval.

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