In a securities suit against former Washington Mutual (WaMu) directors and officers alleging misstatements surrounding the company's problems in its mortgage lending business, plaintiffs have asked a U.S. District Court in Seattle to approve a $41.5 million settlement. Investors initially commenced the lawsuit in 2004 alleging that WaMu and its officers repeatedly and improperly assured the market that WaMu had sufficient hedging practices to allow it to avoid market downturns. Following the acquisition of several other businesses and the improper integration of those companies' information systems, plaintiffs alleged that WaMu failed to disclose that that it was unable to address fluctuating interest rates that disrupted the market.
WaMu filed for Chapter 11 bankruptcy protection in 2008 and that case is ongoing. WaMu is named as a defendant in the securities lawsuit, but those claims have been stayed pending the bankruptcy action. A fairness hearing on the proposed settlement is scheduled for May 2012. ("Former WaMu Execs Agree to $41.5M Securities Suit Deal," Law360.com, October 6, 2011).