Michael Perry, the former chief executive officer of IndyMac Bancorp Inc., agreed to pay $1 million to settle a lawsuit by the Federal Deposit Insurance Corp. in a deal that includes $11 million from insurers.
Perry denied liability as part of the settlement, his lawyer D. Jean Veta said today in an e-mailed statement. The FDIC acknowledged it isn’t claiming Perry caused the bank to fail or that he caused a loss to the FDIC’s insurance fund, she said. The settlement agreement between Perry and the FDIC was filed today in federal court in Los Angeles.
“The FDIC’s lawsuit did not include these more serious allegations because they knew they were patently false,” Veta said.
The FDIC sued Perry in 2011, alleging that he acted negligently when he allowed IndyMac, once the second-largest U.S. independent mortgage lender, to generate and buy $10 billion in risky loans to be sold in the secondary market in 2007. The market at that time had become unstable and illiquid and IndyMac wasn’t able to sell the loans, which caused the bank $600 million in losses, the FDIC said.
IndyMac was seized by regulators in July 2008 after a run by depositors left the Pasadena, California-based company short of cash.
The announcement of the settlement comes a week after a federal jury in Los Angeles found three former IndyMac executives liable for $169 million in damages to the FDIC. The jury agreed the three men continued to make loans to homebuilders that weren’t creditworthy as the real estate market was about to collapse.
“The FDIC as receiver of IndyMac has settled with Michael Perry in an agreement that will bar him from banking and that recovers $1 million in personal assets and up to $11 million of insurance policy money,” FDIC spokesman David Barr said in an e-mailed statement.
The case is Federal Deposit Insurance Corp. v. Perry, 11-05561, U.S. District Court, Central District of California (Los Angeles).