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Compliance November 4, 2010
IndyMac Stock-Drop Suit Reaches Settlement
Lawyers involved in a stock drop lawsuit against IndyMac Bancorp announced a $7 million settlement.
Reported by Fred Schneyer
The Keller Rohrback L.L.P. and Lewis, Feinberg, Lee, Renaker & Jackson, P.C. law firms said the money remaining after the payment of fees and expenses will be allocated to IndyMac Bank, F.S.B. 401(k) Plan participants who held company stock in their plan between July 1, 2006, and June 1, 2010.
According to the settlement notice, the settlement received preliminary approval from a federal judge who has scheduled a January 10, 2011 hearing to consider giving the agreement final approval.
The suit alleged plan fiduciaries violated the Employee Retirement Income Security Act (ERISA) by keeping the stock fund option in the plan when it was no longer prudent to do so (see Law Firm Focuses on Potential IndyMac Suit).
The U.S. Office of Thrift Supervision (OTS) closed the Pasadena, California.-based IndyMac and turned it over to the Federal Deposit Insurance Corp. (FDIC). The move represented the biggest bank failure in years, as IndyMac was the second-largest mortgage lender in the United States and the seventh-largest savings and loan, with $32 billion in assets and $19 billion in deposits.