By Sarah N. Lynch
WASHINGTON Dec 14 Former IndyMac Chief
Executive Michael Perry agreed on Friday to settle a lawsuit
filed by the Federal Deposit Insurance Corp that stemmed from
the collapse of the bank during the financial crisis, the FDIC
The FDIC had alleged Perry "negligently" allowed the
production of a pool of more than $10 billion in "risky"
Under the terms of the settlement, FDIC spokesman Andrew
Gray said it will recover $1 million in Perry's personal assets
and bar Perry from the banking industry.
The collapse of the California-based bank cost the FDIC,
which stands behind bank deposits, an estimated $12.8 billion.
The bank was seized by regulators in July 2008.
The FDIC will also recover up to $11 million in insurance
In a statement, Perry's defense lawyers at Covington and
Burling said their client has "steadfastly denied the
allegation" he was negligent and "continues to deny liability as
part of the settlement."
They added that the FDIC had "extracted" the industry bar
from Perry at the last minute.
"The FDIC apparently views this order as having great
importance," said D. Jean Veta, a Covington partner who leads
"In fact, it is almost meaningless because Mr. Perry is so
disillusioned by the FDIC's conduct in this case that he wants
nothing to do with them, even as a back-up regulator," Veta
An FDIC spokesman declined to comment on Veta's remarks.
The settlement with the FDIC marks the latest effort by
Perry to put his legal troubles behind him.
His lawyers said he opted to settle because insurance funds
to pay for his defense had been exhausted by other lawsuits
brought against former IndyMac directors and officers.
Perry also won dismissal of all but one of a series of
claims filed against him by the U.S. Securities and Exchange
After a federal court had dismissed most of the case, Perry
agreed to pay $80,000 to settle one SEC charge that hinged on
whether or not IndyMac's top executives disclosed crucial
information about the bank's financial health at the onset of
the 2007-2009 financial crisis.
Just last week, three other former officers of IndyMac
Bank's FSB homebuilder division were found liable by a jury of
negligence and breach of fiduciary duty in connection with 23
loans. Jurors found that all three men should pay $168.1 million
in damages for lending to developers who were unlikely to repay
millions of dollars in loans.