|Washington Mutual Shareholders Asking Questions About FDIC|
|by Tom McGregor||Wed, Mar 3, 2010, 10:37 AM|
The Dallas Blog has just obtained documents about Washington Mutual's legal complaint against JPMorgan Chase's takeover of its bank during the financial crisis. Here's a copy-and-paste of a letter sent out to Washington Mutual shareholders:
Washington Mutual Bank (WAMU) shareholders are uniting to challenge
the actions of the FDIC (the Federal Deposit Insurance Corporation) and
JPM (JP Morgan) prior to the seizure of Washington Mutual bank.
Shareholders contend: 1) that these actions were unjustified 2) that they
were unethical 3) that Washington Mutual Bank was not failing. As
evidence of our claims, reports now surfacing indicate the liquidity of the
bank was much better than the public was led to believe; by most
accounts, the bank had enough funds to cover the withdrawals by
depositors. Washington Mutual executives knew these facts; however,
their claims made days before the seizure that the bank was in good
health were ignored. We the concerned shareholders of WAMU contend
that the FDIC was not right in doing so and has caused irreparable harm
to the WAMU stockholders, to the banking community and to the
markets in general. As a result of this action, shareholders of thousands
of companies throughout the world have lost trillions of dollars since.
The FDIC seized Washington Mutual Bank saying there had been a bank
run amounting to 16.7 billion dollars in 10 days. The reason this money
was withdrawn from the bank is unknown. The FDIC saw money moving
out of larger accounts and assumed a run was in progress. Just 2 weeks
before the FDIC seized the bank WAMU had worked out a solid business
plan with the OTC (Office of Thrift Supervision). At the time of seizure,
WAMU had access to $50 billion in assets: sufficient liquidity to handle all
their obligations. The situation, however, seemed different to the FDIC,
whose reserves were low as a result of not collecting insurance
premiums from 1996-2006 and the bank failures in the previous weeks.
Appointed officials at the FDIC were concerned that if the failure of
Washington Mutual was followed by other bank failures as well, the
agency would not be able to handle the situation. Despite this concern,
the FDIC had the ability to borrow $30 billion from the Federal Reserve;
however, for some reason it did not do so. The FDIC’s move was more
about protecting the federal deposit insurance company than about
protecting the insured.
In short, the FDIC acted prematurely, behind closed doors. The
Washington Mutual Executives had no prior knowledge of the FDIC’s
plan. In fact, at the time of the seizure WAMU was in the midst of sale
negotiations with several other banks, and had been given no deadline
by the FDIC to find a buyer. Despite WAMU’s good-faith efforts to find
buyers, banks which were contemplating buying Washington Mutual had
been notified by the FDIC that the FDIC was to auction off the bank,
again without WAMU’s knowledge. This FDIC action prevented a sale
from being made. Even worse for WAMU, behind closed doors, the FDIC
was offering prospective buyers a much sweeter deal than the ones
WAMU was negotiating. The FDIC arranged for JPMorgan to purchase the
$300 billion dollar corporation for the bargain price of 1.9.
The FDIC needs to be held accountable for its short sighted action which
has caused havoc throughout world markets. The FDIC had many
options in the event that WAMU faltered. The option chosen, seizing the
bank and selling it overnight for a miniscule fraction of its value in a
clandestine deal with JPMorgan, was the worst of any options they had.
Did the FDIC act appropriately? Most shareholders don’t think so and they
want the FDIC to answer for that.
The result of the FDIC’s hasty and secretive action was that the
shareholders of Washington Mutual Bank lost billions of dollars.
Shareholder portfolios were emptied overnight - because of collusion
between the FDIC and JPM in weeks leading up to the seizure. Now,
shareholders seek redress.
Never has the law been applied with such disregard for its intention.
Government regulators, supposedly the ones responsible for protecting
us, circulated insider information about the bank to its competitors and
precipitated a catastrophic collapse whose repercussions are still being
Coincidentally, JPMorgan has been the institution which has profited
handsomely from these failures. Coincidentally, the former head of the
SEC (Securities and Exchange Commission) whose role is to oversee
stock trading, works at JPMorgan, and this week was accused of private
conversation causing difficulties that may have resulted in another recent
bank failure, that of Bear Stearns. JPMorgan has also been accused of
interfering in Lehman Brothers’ access to $5 billion dollars which helped
catapult their demise. And the company has been accused of denying
WAMU access to $5 billion dollars they had on deposit with JPMorgan.
Is this coincidence? We think not. We demand the FBI and the
legislature thoroughly investigate the relationships and actions of the
OTS , the FDIC, the SEC and JPMorgan management. We do understand
that the government is currently investigating Washington Mutual, but we
contend these other institutions need to be investigated as well.
One of our goals is that the assets or at least the asset value of
Washington Mutual be returned to the stockholders, just as they were in
the lawsuit filed by First City Bancorporation in 1992. In that suit, (1993)
the FDIC was forced by the courts to return 145 million dollars to
creditors and depositors, after the seizure of that bank and its assets.
The same situation happened here. Consequently, our members feel that
there seems to be legal precedent for holding the FDIC accountable for
their actions. Holding the FDIC accountable is exactly what the members
of this organization intend to do.
Members of the group are currently seeking exceptional legal
representation - the members of the United States Congress themselves!
We ask for special legislation. We ask for special dispensation. We ask for
Congressional support. We want our bank back - the FDIC should not
have given it away to start with. We beseech our government to right this
written by hopeful for justice , March 04, 2010
Finally, some press coverage of this great scandal/swindle.
Shouldn't you be writing this for the NY Times or Wall Street Journal?
written by SIXX , March 04, 2010
Do you mind if I send this for publication. We like your information about China. Keep it up.
Colonel D.X. "SIXX" Prince
written by Kyle , March 04, 2010
Finally , there is someone speaking up for us. Since it seem to be silence for a long time. Thank you !
written by alex rolinski , March 04, 2010
as a holder of wamu stock i
encourage you to pursue your
effort in obtaining the assets that were seized by
FDIC when they it was taken
over. I find it difficult to
understand how the government
can allow this blatant
disregard of wamu's financial capability to stay afloat.
written by SUSHY2 , March 04, 2010
JPMORGAN AND THE FDIC ARE MAKING A MOCHERY OF THE DOJ.HOW MUCH LONGER ARE WE GOING TO TOLERATE SUCH CORRUPTION AND DESRESPECT TO OUR CIVILIZE JUSTICE SYSTEM?
written by Stephen , March 04, 2010
As a former Washington Mutual customer, you can read my open letter to Chase Bank here: http://wp.me/pwg7T-94
written by Investor , March 04, 2010
we need more people to get the words out there to the public. FDIC is not above the laws. They need to be hold accountable for their actions. They are scammers.
written by dr.pepp , March 04, 2010
Get the truth here...
written by George , March 05, 2010
You need to research all of the players especially OTC Director Dochow, Robert Bass, David Bonderman and their ties to the Obama team.
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