Former executives of Washington Mutual Inc. agreed to settle a lawsuit for less than 10% of the $900 million originally sought by the Federal Deposit Insurance Corp. for their role in the biggest bank failure in U.S. history, according to a published report.
A large portion of the payout, which is expected to total less than $75 million, would come from insurers and the bank's estate, and not from the former executives, said the Wall Street Journal, citing unnamed people familiar with the situation.
The FDIC had accused former Washington Mutual Chief Executive Kerry Killinger, Chief Operating Officer Stephen Rotella and home lending chief David Schneider of gross negligence and reckless disregard for the long-term safety of the bank.
An attorney for Rotella and Schneider told the Journal that a settlement had been reached, but declined to comment on the dollar amount. The defendants did not admit or deny any wrongdoing in settling the case, according to the report.