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U.S. markets recover from steep losses
SEATTLE, July 2 (UPI) -- A Washington Mutual shareholders' group has agreed to settle its complaints with the former bank for $208.5 million, court papers show.
The Seattle Times reported Saturday the settlement, which must be approved by U.S. District Judge Marsha Pechman, comes to 7 cents per common share -- 5 cents of which will go to shareholders of common stock and 2 cents for lawyer fees.
JP Morgan Chase purchased Washington Mutual for $1.9 billion in 2008 after federal regulators seized the bank.
The lawsuit targeted bank executives and accountants, alleging the bank took undue risks in the mortgage business after reassuring investors their money was safe.
The lawsuit said the bank pledged "the company's rigorous underwriting standards and meaningful risk controls would protect the company against losses from borrower defaults."
"These assurances were false," the lawsuit says.
The former bank's insurance company will pay $105 million out of the settlement, if the deal is approved.
Securities companies will pay $85 million and accounting firm Deloitte & Touche will pay $18.5 million.
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