FDIC sues Washington Mutual’s former CEO over bank’s failure
The Federal Deposit Insurance Corp. sued the former chief executive of Washington Mutual and two of his top lieutenants Thursday, accusing them of reckless lending before the 2008 collapse of what was the nation’s largest savings bank.
The civil lawsuit, seeking to recover $900 million, is the first against a major bank chief executive by the regulator and follows escalating public pressure to hold bankers accountable for actions leading up to the financial crisis.
Kerry Killinger, Washington Mutual’s longtime chief executive, led the bank on a “lending spree” knowing that the housing market was in a bubble and failed to put in place the proper risk management systems and internal controls, according to a complaint filed Thursday in federal court in Seattle.
David Schneider, Washington Mutual’s president of home lending, and Stephen Rotella, its chief operations officer, were also accused of negligence for their roles in developing and leading the bank’s aggressive growth strategy.
“They focused on short-term gains to increase their own compensation, with reckless disregard for WaMu’s long-term safety and soundness,” the agency said in the 63-page complaint. “The FDIC brings this complaint to hold these highly paid senior executives, who were chiefly responsible for WaMu’s higher-risk home lending program, accountable for the resulting losses.”
—Eric Dash, The New York Times
Tibetan monk dies protesting Chinese rule by self-immolation
BEIJING — A young Tibetan monk who set himself on fire to protest Chinese rule in the vast Tibetan regions of western China died early on Thursday. It was the first time that a monk protesting against China had killed himself through self-immolation, according to historians of modern Tibet.
The act appeared to reflect the sense of desperation and futility that simmers among Tibetans who chafe at rule by China, which invaded central Tibet in 1951. The monk, Phuntsog, 20, belonged to the Kirti Monastery in Sichuan Province. The monastery has been a center of protest against Chinese policies and was especially active in the 2008 Tibetan uprising.
“China’s violent rule in Tibet has escalated since 2008 to a point where Tibetans feel compelled to take desperate action,” Tenzin Dorjee, executive director of Students for a Free Tibet, based in New York, said in a statement. “Phuntsog Jarutsang’s self-immolation is a window into the deep suffering and frustrations that Tibetans everywhere are feeling, and is an urgent cry for help that the global community cannot ignore.”
Phuntsog set himself on fire at 4 p.m. Wednesday, according to a report Thursday by Xinhua, the official Chinese news agency.
—Edward Wong, The New York Times