Defunct subprime lender Washington Mutual, aka WaMu, and several of its business partners have agreed to settle a class-action lawsuit by pension plans and investors, who accused them of securities fraud.
The largest loser was the (Canada) Ontario Teachers’ Pension Plan Board, claiming to have suffered $24 million in losses. The remaining plaintiffs were smaller pensions, investor groups and individuals. Their lawsuit accused WaMu and its executives of securities fraud by filing false financial reports and painting an unrealistic picture of its underwriting standards.
The U.S. seized WaMu in 2008 and sold its assets to JP Morgan Chase for $1.9 billion.
Earlier articles in the California Real Estate Fraud Report reported accusations that former Washington Mutual employees pressured appraisers to overvalue properties (appraisal fraud, real estate fraud) and push well-qualified loan borrowers into more profitable subprime loans (mortgage fraud) that were unnecessarily costly to those consumers.
Read the original article in the Los Angeles Times.