Key People Involved in the Seizure
Many
people were involved directly or behind the scenes in the seizure of Washington
Mutual Bank. JPMorgan CEO Jamie Dimon made an offer for WaMu in April
2008 and subsequently purchased WaMu's assets from the FDIC after the
seizure. Former JPMorgan exec Rotella, WaMu's President and COO, was responsible
for oversight of retail, commercial, and mortgage loans. Secretary Paulson
insisted that WaMu should have sold itself after
WaMu CEO Kerry Killinger rebuffed Dimon and accepted an investment from
TPG. SEC Chairman Cox refused to put WaMu on the protected “No Short”
list. Killinger was forced out and replaced by Alan Fishman. OTS Director
Dochow was responsible for oversight of WaMu, despite his checkered past.
OTS Director Reich approved the seizure, while FDIC Chairman Bair conducted
secret negotiations to sell WaMu to avoid possible depletion of their
insurance fund. After the Chapter 11 filing, Williams was named President
and A&M's Maciel was named CFO.
JPMorgan
CEO Jamie Dimon
“JPMorgan
had made a takeover bid of $8 per share in company stock, or about $7
billion, for the 119-year-old Seattle, Washington-based bank. “
“Wall
Street Journal said that the JPMorgan offer was in stock, so if the stock
were to rise, it would prove beneficial for Washington Mutual Shareholders.”
Washington
Mutual Selects TPG Deal Over JPMorgan $7B Offer
Despite
a serious interest expressed in Washington Mutual prior to the seizure,
JPMorgan Chase did not put in a bid as Goldman Sachs attempted to sell
WaMu.
WaMu
Auction Gets No Bidders Yet, FT Reports
“`JPMorgan
is getting a steal compared with what they were going to pay,' said Scott
Adams, a pension and investment analyst at the American Federation of
State, County and Municipal Employees in Oakland, California, which owns
WaMu shares. `It's very tragic.'''
“JPMorgan
had 75 people involved in the transaction and ``bid to win'' because it
wanted WaMu's assets, Dimon said on an earlier conference call today.
JPMorgan used its own investment bank to value the mortgages, he said.
``We don't know and we don't care'' about rival bids for WaMu, he said.
“
JPMorgan
Buys WaMu Bank Business as Thrift Seized
President
and COO Rotella
Steve
Rotella, former head of JPMorgan's residential lending business, was named
WaMu's President and Chief Operating Officer on January 10, 2005. His
responsibilities include oversight of retail, commercial, and mortgage
businesses as well as day-to-day administration.
“Rotella
thinks WaMu's mortgage business needs to speed up processing of customer
applications. He also thinks WaMu could do much more with small-business
customers, and that its Web site could be more sales-oriented. “
Washington
Mutual Confident it's on the Right Path
WaMu
Offers New All-in-One Mortgate, Home Equity Loan
Private
Equity Firm TPG
TPG,
formerly Texas Pacific Group, is a private equity group with offices worldwide.
TPG led a group of investors who purchased $7B worth of newly issued stock.
TPG co-founder David Bonderman was given a seat on WaMu's board.
$7B
Gives Shaky WaMu Firmer Footing
"In
TPG we have found a great partner with a terrific investment track record,"
said Washington Mutual chief Kerry Killinger. "We are particularly
pleased that David [Bonderman] will rejoin our board. He has a long history
with the company - having previously served as a Washington Mutual director
- and we are privileged to once again benefit from his insight and experience."
Washington
Mutual's Smart-Money Rescue - Apr 8, 2008
Treasury
Secretary Paulson
“Nov.
9 (Bloomberg) -- U.S. Treasury Secretary Henry Paulson warned former Washington
Mutual Inc. Chief Executive Officer Kerry Killinger to sell the thrift
to JPMorgan Chase & Co. two months before WaMu failed, the Seattle
Times reported. “
Paulson
said, “You should have sold to JPMorgan Chase in the spring, and
you should do so now. Things could get a lot more difficult for you,”
reported the Times, citing a WaMu executive.
Bloomberg
News Article: Paulson Warned Washington Mutual to Sell
WaMu
CEO Killinger
“Washington
Mutual’s decision to oust Kerry Killinger as chief executive after
18 years could have far-reaching repercussions for the Puget Sound area,
particularly if the thrift’s new chief executive decides to make
sweeping changes at the embattled financial institution, according to
experts. “
“WaMu
also announced that it has entered into an agreement or “Memorandum
of Understanding” with its regulatory federal agency, the Office
of Thrift Supervision (OTS), to provide a multi year business plan, forecasting
its earnings, asset quality and business segment performance. “
CEO
Killinger out, Fishman in at Washington Mutual
WaMu
CEO Fishman
“Fishman
was formally announced this past Monday as WaMu's first new CEO in nearly
two decades. He succeeded Kerry Killinger, who built WaMu from a Puget
Sound-centered thrift into a nationwide financial powerhouse. “
He served as Washington Mutual's CEO for less than one month.
New
WaMu CEO Called a Savvy, Scrappy Exec
SEC
Chairman Cox
WaMu
CEO Killinger sent a fax to Chairman Cox requesting that WaMu be added
to the proposed emergency order to prohibit short selling in certain securities.
Despite having been faxed at 1:30 pm Jul 17 2008, it was received more
than five days later by the Chairman's Correspondence Unit at Jul 22 2008
at 8:40 pm. WaMu was not added to the list.
SEC
Document - Fax Requesting Inclusion in "No Short" List
“Christopher
Cox stepped down as U.S. Securities and Exchange Commission chairman,
leaving behind a demoralized agency “
Cox
Quits at SEC, Leaves Schapiro to Restore Clout
OTS
West Regional Director Dochow
“Dochow
was the top supervisory official at the agency in the late 1980s, during
the savings and loan crisis. He was demoted in March 1990 and transferred
to the OTS office in Indianapolis, but later rose through the agency again
to become the head of the Western region — where numerous large
thrifts were located. “
“Seattle-based
thrift Washington Mutual Inc. in September became the biggest bank to
collapse in U.S. history, with around $307 billion in assets. It was acquired
by JPMorgan Chase & Co. for $1.9 billion. “
Regulator
in IndyMac and Washington Mutual Cases Gets Reassigned
Director
Dochow quietly retired a short time after having been reassigned.
OTS
Director and FDIC Board Member Reich
Director
Reich authorized OTS West Regional Director Dochow to seize WaMu, appointing
the FDIC as receiver of the 'failed' bank. Director Reich stated that
WaMu “is likely to be unable to pay its obligations or meet its
depositors' demands in the normal course of business,” despite an
OTS Fact Sheet stating that WMB “met the well-capitalized standards
through the date of receivership.” Director Reich left his position
at the OTS on February 27, 2009.
Grounds
For Appointment of FDIC as Receiver
OTS
Fact Sheet - WMB Met the Well-Capitalized Standards Through the Date of
Receivership
OTS
08-046 – Washington Mutual Acquired by JPMorgan Chase
OTS
09-007 - OTS Director Reich Sets Departure Date
“In
the debate over how aggressive regulators should be in examining troubled
banks, it has usually been the FDIC against all comers. The other banking
regulators tend to be more concerned about avoiding the disruption that
comes from a bank failure than the FDIC, which has its insurance fund
to protect.
"Tension
between the FDIC and the OTS and the OCC [the Office of the Comptroller
of the Currency] and for that matter the Federal Reserve has been there
forever," says Ellen Seidman, a former OTS director.”
IndyMac
Exposes Rift Between Regulators
FDIC
Chairman Bair
“By
the end of 2009, about 100 U.S. banks with collective assets of more than
$800 billion will fail, predicts Christopher
Whalen,
managing director of Institutional Risk Analytics, a Torrance, California-based
firm that sells its analysis of FDIC data to investors. “
“It
won't take many more failures before the FDIC itself runs out of money.
The agency had $45.2 billion in its coffers as of June 30, far short of
the $200 billion Whalen says it will need to pay claims by the end of
next year. “
Morning,
09/25: Bloomberg: FDIC May Need $150 Billion Bailout as More Banks Fail
Afternoon
09/25: Open Letter to Bloomberg News about FDIC Deposit Insurance Fund
Evening
09/25: JPMorgan Chase Acquires Banking Operations of Washington Mutual
Chairman
Bair told reporters in a conference call after the seizure, “This
institution was a big question mark about the health of the deposit fund.
It was unique in its size and exposure to higher risk mortgages and the
distressed housing market. This is the big one that everybody was worried
about.”
Fed
Takes Over WaMu in Largest Bank Failure in American History
“Federal
regulators wanted to avoid a collapse that would severely strain the nation's
deposit-insurance system. The big-name investors who'd pumped billions
into WaMu just months ago sought to salvage something from their ill-timed
intervention. And the half-dozen banks hovering over WaMu saw a grand
opportunity but wanted to pay as little as possible.”
“Before
it was over, regulators would hold a secret auction behind the backs of
WaMu management and seal a deal the company was powerless to oppose.”
WaMu's
Desperate Last Days
“Regulators
also hustled to shut down WaMu faster than they have with other failing
banks this year. Normally, when the FDIC and another regulatory agency
are preparing to take over a bank, the FDIC will solicit bids for the
bank on Tuesday or Wednesday and then seize it on Friday evening, after
the bank's branches have closed for the weekend. Sometimes the FDIC will
even wait another week to step in. Every bank to fail this year has been
shut down on a Friday. The FDIC steps in on Fridays to ensure a smooth
transition so that customers hardly notice the handover.”
“In
WaMu's case, the FDIC set a Wednesday evening deadline for interested
parties to submit their offers for various parts of WaMu. Twenty-four
hours later, they were already preparing to seize the bank. Earlier this
month, Treasury Secretary Henry Paulson made it clear to WaMu that the
company should have accepted the takeover deal JPMorgan had offered earlier
this year, according to a person close to WaMu.”
WaMu
is Seized, Sold Off to JPMorgan
WaMu
President Williams
”A
U.S. bankruptcy court has granted a request from Washington Mutual (WAMUQ.PK)
to appoint Robert Williams as president of the bankrupt savings and loan.
“
'Williams
will be paid a salary of $175,000 for the four month "critical period"
starting November 13, 2008, through March 12, 2009, and a monthly salary
of $75,000 through the "transition period" starting March 13,
2009, through November 13, 2009, according to court papers.'
'In
the "consulting period" starting November 14, 2009 through March
14, 2010, Williams will get a salary of $50,000 a month, the filing said.'
Bankruptcy
Court Approves Williams as WaMu President
WaMu
CFO Maciel
“Maciel
will serve as Washington Mutual's designated principal financial officer
and principal accounting officer for Securities and Exchange Commission
reporting purposes. Under his employment deal, Maciel he will continue
to work for turnaround firm Alvarez
& Marsal
North America, and will not receive any compensation directly from Washington
Mutual.” Mr. Maciel is a senior director in A&M's Turnaround
and Restructuring department.
Turnaround
Expert John Maciel Named WaMu CFO; Williams as President
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