COMPLAINT | FDIC v. MICHAEL PERRY “Former IndyMac CEO Sued For $600 Million”

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COMPLAINT | FDIC v. MICHAEL PERRY “Former IndyMac CEO Sued For $600 Million”

COMPLAINT | FDIC v. MICHAEL PERRY “Former IndyMac CEO Sued For $600 Million”

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

F’EDERAL DEPOSIT INSURANCE
CORPORATION, AS RECEIVER FOR
INDYMAC BANK, F.S.B.
,
Plaintiff,

V.

MICHAEL PERRY,
Defendant.

[…]

PRELIMINARY STATEMENT

3. Between at least April and October 2007, defendant Michael Perry (“Perry”), chief executive officer (“CEO”) of IndyMac Bank, F.S.B. (“Bank” or “IndyMac”), negligently permitted, and presided over, and failed to suspend, limit or stop, the production of a pool of more than $ 10 billion in risþ, residential loans intended for sale into a secondary market that at the time was admitted by Perry to be increasingly unstable, unpredictable, and illiquid due to increasing concerns about the credit quality of loans (including IndyMac’s loans). Perversely, instead of enforcing credit standards, Perry chose to roll the dice in an aggressive gamble to increase market share while sacrificing credit standards, even though a reasonable banker of a depository institution would have suspended, limited, or stopped the production of these risky loans during this time of known, unprecedented, and escalating risks. Unable to sell these loans as intended into an illiquid secondary market, Perry lost his gamble and IndyMac was forced by the fourth quarter of 2007 to transfer the loans into IndyMac’s investment portfolio where the loans ultimately generated substantial Bank losses in excess of $600 million. At the time of this transfer in the fourth quarter of 2007, IndyMac itself projected,that lifetime losses for these loans would exceed at least $600 million.

[…]

[ipaper docId=59836760 access_key=key-7p2mgpw2twn44je0dm7 height=600 width=600 /]

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