Wamu asks to probe Fed over collapse

WILMINGTON, Delaware Tue Dec 15, 2009 6:03pm EST

Employees of Washington Mutual leave its headquarters in downtown Seattle, Washington September 26, 2008. REUTERS/Robert Sorbo

Employees of Washington Mutual leave its headquarters in downtown Seattle, Washington September 26, 2008.

Credit: Reuters/Robert Sorbo

WILMINGTON, Delaware (Reuters) - Bankrupt holding company Washington Mutual Inc asked a federal court to compel the U.S. Federal Reserve, U.S. Treasury and more than a dozen others to turn over documents relating to its collapse in 2008.

The company wants to investigate discussions between JPMorgan & Chase Co, regulators, competitors and rating agencies it said led to the seizure of Washington Mutual, or WMI, according to a filing in bankruptcy court on Monday.

It said the alleged misconduct includes JPMorgan "disclosing confidential information, in violation of the confidentiality agreement, to government regulators, ratings agencies, media and investors in an effort to harm WMI by driving down WMI's credit rating and stock price."

Washington Mutual said it needs to determine if it has valuable claims against regulators and others that could be pursued on behalf of its creditors.

The company was the largest U.S. savings and loan when it was seized by the government in September 2008, at the height of the financial crisis, and sold for $1.9 billion to JPMorgan in what Washington Mutual has called a "fire sale."

The company has been investigating possible claims against JPMorgan since the middle of 2009 and cited some of the documents provided by the bank to justify expanding its investigation.

It cites an internal JPMorgan email it said shows that a week before Washington Mutual was seized, the bank's executives were contacted by the Federal Deposit Insurance Corp regarding their interest in Washington Mutual.

The request to expand its investigation also relies on information from a suit filed by American National Insurance Co, which is suing JPMorgan for its losses on its investments in Washington Mutual securities.

American National said in its suit that JPMorgan used former JPMorgan executives who went to work for Washington Mutual as part of a long-term plan to acquire the savings and loan.

JPMorgan declined to comment.

The case is In re Washington Mutual Inc, U.S. Bankruptcy Court, District of Delaware (Wilmington), No. 08-12229.

(Reporting by Tom Hals; editing by Andre Grenon)

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