Status update on SEC vs. Michael W. Perry

On May 31, 2012, U.S. Judge Manuel L. Real issued an order granting my (and Indymac’s former Chief Financial Officer) partial summary judgment on five of the seven of the SEC’s key disclosure allegations; granting our entire motion as matter of law, applied to undisputed facts (if the judge rules that facts are in dispute, then they must be resolved at a trial not summary judgment).

The two remaining SEC disclosure allegations are both “omissions” (that I failed to disclose something, as opposed to disclosing something in a misleading manner) allegations related to Indymac’s 10-Q and 8-K filings on May 12, 2008.

Think about the big picture of the SEC’s remaining allegations against me. On May 12, 2008 ONLY, after roughly 16 months of very bad, publicly-disclosed news about Indymac (and the industry), they allege that I alone, even though I was not a member of Indymac’s disclosure committee and not involved in the decisions on how these matters should be disclosed, BEGAN to commit securities fraud by negligently or intentionally (the SEC still can’t decide which it was….negligent or intentional?) omitting two facts related to Indymac Bank’s regulatory capital.

That is utterly ridiculous on its face. What motive would I have had to BEGIN committing securities fraud on May 12, 2008? And how would I have done this by myself? I wasn’t on Indymac’s disclosure committee; as a result I wasn’t involved in the disclosure decisions regarding these two matters. I didn’t instruct anyone to omit these items. And no one told me they thought they should be disclosed. Finally, even with the benefit of hindsight, I don’t think these relatively technical disclosures really mattered by May 12, 2008. We had been publicly disclosing mountains of bad news about Indymac throughout 2007 and 2008, including on May 12, 2008. Many people questioned our ability to survive by then and our stock price on May 12, 2008; around $2 a share, reflected this fact.

As I have said before, I tried to settle this matter in early 2011 (before they sued me) and more recently, yet the SEC continues to pursue this case without regard to the truth. The truth is that neither I nor anyone else at Indymac committed securities fraud.

On June 13, 2012, we filed a partial summary judgment motion to dismiss one of the remaining two SEC disclosure allegations (the risk-weighting issue) and the 17(a)(2), negligence charges, in an effort to narrow the case for trial. Judge Real granted our motion, in full, on July 16, 2012, and set a trial date of September 4, 2008 for the SEC’s one remaining disclosure allegation.

At a pre-trial conference on August 6, 2012 the Court vacated its July 16, 2012 Order granting my motion for partial summary judgment of the risk-weighting issue and the 17(a)(2) claims, cancelled the trial date for September 4, 2012, set a date of September 10th for the rehearing of my partial summary judgment motion, and allowed the parties to submit further filings by August 22nd (which we did and I have already disclosed on the blog in Statement 21).

There is more behind the Judge’s decision at the August 6th pre-trial conference, but it’s not relevant to this brief update. The bottom line is the SEC thinks this decision is favorable (temporarily) to them. I am not sure; frankly neither side knows how the Judge will rule.

Whether or not the Judge grants my motion to dismiss the risk-weighting issue on September 10, 2012, I will still be going to trial where I am confident and in fact anxious for the truth (that I did not commit securities fraud) to emerge.

Posted on August 28, 2012, in Postings. Bookmark the permalink. Leave a comment.

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