On Friday, January 22, 2016, eleven banks, including Merrill Lynch, RBS, and Barclays, agreed to settle claims brought by the Commonwealth of Virginia in a 2014 action alleging misrepresentations as to the nature, quality, characteristics, and risk profile of RMBS certificates. The certificates were purchased by the Virginia Retirement System, an agency of the Virginia Commonwealth. In its complaint, the Commonwealth alleged injury of $383.91 million and demanded treble damages of $1.15 billion, plus a civil penalty of $5,000-$11,000 per violation. The settlement announced on January 22 is for $63 million. Press Release. Complaint.
risk profile
FDIC Sues Former Washington Mutual Executives and Their Wives
On March 16, 2011, the FDIC filed a complaint against former Washington Mutual CEO, Kerry K. Killinger and his spouse, former COO Stephen J. Rotella and his spouse, and former home loans president David C. Schneider in the US District Court of the Western District of Washington. The complaint alleges that Killinger, Rotella, and Schneider profited by recklessly increasing the risk profile in WaMu’s held-for-investment loan portfolio. The complaint further alleged that these executives were responsible for WaMu’s higher risk home lending program that eventually caused the demise of the bank. In addition to the claims against Killinger, Rotella and Schneider for gross negligence, ordinary negligence and breach of fiduciary duty, the FDIC also asserted claims against Killinger’s and Rotella’s wives, alleging that Killinger and Rotella fraudulently conveyed valuable assets to their wives in order to hinder, delay, or defraud their creditors. Complaint.