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The Federal Insurance Deposit Corp. has filed a lawsuit against Michael Perry, former chief executive officer of IndyMac Bancorp Inc., the subject of one of the largest bank failures to come out of the recent recession. The commission, which is serving as IndyMac’s receiver, alleged in a complaint filed on July 6 in federal court in Los Angeles that Perry tried to sell $10 billion in risky residential loans in a secondary market he knew had become increasingly volatile. Many of the loans involved two mortgages — one that covered 80% and a piggyback loan that provided the remaining 20%, which allowed a buyer to avoid a down payment, the complaint said. After IndyMac was unable to sell the loans, they allegedly were absorbed as $600 million in investment losses during the bank’s fourth quarter of 2007. Perry’s attorney, Ben Razi, a partner at Washington’s Covington & Burling, issued a formal statement calling the suit “belated” and “baseless.” “This lawsuit is another transparent ploy designed to deflect blame away from the FDIC for its own failures,” Razi said. “In fact, despite the new allegations, the FDIC has recognized in a separate lawsuit against other IndyMac executives that Mr. Perry was a prudent, responsible CEO.” In that case, filed last year, the FDIC sued four former executives of IndyMac’s homebuilder division. The case is one of seven lawsuits in which the FDIC has named 52 former directors and officers as liable for the collapse of their financial institutions. The FDIC has authorized lawsuits in connection with 28 failed institutions against 248 individuals for damages worth more than $6.8 billion, according to the commission’s Web site. IndyMac Bank, a savings and loan spinoff of Countrywide Financial Corp. based in Pasadena, Calif., was the second largest independent mortgage lender in the nation, with $33.7 billion in assets, before its holding company, IndyMac Bancorp Inc., was forced to file for bankruptcy protection in 2008. Much of the bank’s holdings were sold to a group of investors, including George Soros and John Paulson, who have since opened a new thrift called OneWest Bank. In its case against Perry, the FDIC cited an e-mail he allegedly sent on Sept. 7, 2007, to bank personnel, saying that “we were idiots, absolute idiots to allow ourselves to do 80/20 piggybacks at the tail end of a long run in housing….” In a Jan. 8, 2008, e-mail to bank managers, after the loans were transferred as losses, Perry allegedly wrote: “This time the losses are 100% operating management’s fault (from me on down)….” Later that year, in a March 31 article in the former Crain’s Financial Week, he said, “look, we’ve had a lousy performance, and the buck stops with the CEO….I’m a big believer in being held to account,” the complaint said. Perry and two former chief financial officers of IndyMac were charged on Feb. 11 by the U.S. Securities and Exchange Commission with securities fraud. The SEC alleged that Perry, Scott Keys and S. Blair Abernathy misled investors about the financial condition of the bank. Abernathy settled the suit without admitting fault by agreeing to pay $100,000 in penalties and $25,000 in disgorgement. He was suspended for two years from doing accounting work before the SEC. Amanda Bronstad can be contacted at [email protected].

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