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withdrawn from the bank is unknown.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 felt
today.
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.
For further information about events surrounding the seizure or to join the
effort for justice, Click on the LINK
.
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 wrong.