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WaMu, Creditors Face Insider Trading Claim at Exit Hearing

Washington Mutual Inc., former owner of the biggest U.S. bank to fail, began a court hearing today to end its bankruptcy facing a shareholder claim that it enabled hedge funds to profit from insider trading.

During a three-day hearing, shareholders will try to show that WaMu’s reorganization plan is tainted by the hedge funds’ alleged use of confidential information to trade in the bank holding company’s debt.