Monthly Archives: July 2011
My name is Michael Perry. I am the former Chairman and Chief Executive Officer of Indymac. I have kept silent for three years in the hope that I would be left alone and allowed to rebuild my professional life, but unfortunately that has not been the case. I have been forced to defend myself against unwarranted, public allegations.
On July 11, 2008, Indymac Bank was seized by the Federal Deposit Insurance Corporation (FDIC) after a U.S. Senator’s inappropriate public statements during the financial crisis caused a “run on the bank” that rapidly depleted the bank’s ample liquidity. As a result of this bank run and the fact that Indymac was deemed by banking regulators to be “Not Too Big To Fail”, it was not around just a few months later, at the height of the financial crisis, to receive any of the significant and unprecedented assistance the government provided to every “Too Big To Fail” financial institution and hundreds of smaller financial firms. Without this assistance, many, if not most would not have survived, including some of the largest and oldest firms.
Since that time, I and others have been the subject of various government investigations and named as defendants in numerous civil lawsuits, including ones filed by the Securities and Exchange Commission (SEC) on February 11, 2011 (31 months after Indymac), and the Federal Deposit Insurance Corporation (FDIC) on July 6, 2011 (3 years after Indymac).
The plaintiffs in these civil lawsuits don’t care about the facts or the truth; these suits are filled with distortions, inaccuracies and in some cases lies. They are primarily being pursued to gain access to potential settlement proceeds from directors and officers liability insurance, or in the case of the SEC to show politicians, the press, and public that they are now tough enforcers of the securities laws. The FDIC is seeking a significant share of D&O insurance proceeds, but like many private insurance companies (the FDIC administers a private, banking industry insurance fund backed by the U.S. Government) they are inappropriately seeking to blame their catastrophic losses and their current insolvency, as a result of this unprecedented systemic and macroeconomic crisis, not on their decisions (it was the FDIC who decided to insure new and/or unique business models like Indymac Bank’s), but on former banking executives like myself.
Importantly, because Indymac decided in 2000 to insure its business model with the FDIC, unlike government-sponsored mortgage lenders Fannie Mae and Freddie Mac (and others), Indymac has not cost U.S. taxpayers one penny. And while the seizure of Indymac Bank has cost the FDIC’s insurance fund billions, I, industry experts, and others believe that much of the insurance fund’s loss was avoidable, if only the FDIC had focused solely on its duties as a conservator.
Not one of these lawsuits has any merit.
I, and Indymac’s management team (and its directors), made appropriate business decisions based on the facts available to us at the time and always with the primary goal being to keep Indymac Bank safe and sound, within the parameters of our regulatory-approved, mortgage lending business model. And importantly, we always acted with honesty, integrity and complete transparency and properly complied with all relevant regulations and laws.
The plaintiffs know this and as a result do not want these matters to go to trial where they will likely lose. This is what happens in America today. Frivolous lawsuits rarely go to trial and nearly always settle despite their lack of merit, because of the time and cost to defend against them (and perversely having a “pot” of liability insurance, or even better a deep-pocket, corporate indemnification, encourages more lawsuits and more settlements). It is particularly disheartening though, to have U.S. government agencies like the SEC and FDIC engaged in this type of behavior in order to further their own image at the expense of honest individuals like myself and others’ reputation and liberty.
In conclusion, this site’s purpose is to counter the allegations in these lawsuits (and regurgitated in the press as authoritative, when they are not) with the truth and the facts, for those who care to spend the time to read the documents on this site and understand them. I plan to start out slowly, focus on the government cases, and then if I have the time and it is warranted, expand the site to include my views, based upon my experiences and extensive study post-crisis.