The Truth is Emerging Despite the SEC’s Attempts to Conceal It

Below are excerpts from IndyMac former Chief Accounting Officer’s Sworn SEC Testimony, February 21, 2012:

SEC’s Searles: “And what where the dates of your employment with IndyMac?”

IndyMac CAO: “Approximately January 1, 2006, through approximately May 19, 2009, which would include IndyMac Federal Bank.”

SEC’s Searles: “And how would you in just a few sentences describe your duties at IndyMac?”

IndyMac CAO: “I was responsible for all SEC regulatory reporting, accounting policy, and substantially all general accounting for the organization.”

SEC’s Searles: “What was your personal involvement in the preparation or review of the 10-K’s and 10-Q’s of IndyMac?”

IndyMac CAO: “My involvement was to review the draft document when it was prepared. I reviewed it for disclosure content based on things that I was aware of. I reviewed it to ensure that items that were raised as part of the Disclosure Committee process were appropriately addressed within….either addressed within the….within the documents, provided feedback to my team on disclosures and how those disclosures would be worded, presented, and I would say those were my general responsibilities.”

SEC’s Searles: “And regulatory reporting, this other function you described, what are you referring to there?”

IndyMac CAO: “Primarily the preparation of the TFR. It’s a quarterly report that’s filed with the OTS.”


SEC’s Searles: “And what prior experience prior to IndyMac are you drawing on?”

IndyMac CAO: “I spent seven years with ABN AMRO, three and a half particularly responsible for accounting policy and reporting which included regulatory reporting to the OCC and the Fed, and then my three….give or take three years with Bank One where I was responsible for SEC reporting and Thrift…not Thrift, bank financial reporting with Bank One.”


Perry Attorney Razi: “And what was your role with respect to this CEO and CFO checklist for disclosure controls….?”

IndyMac CAO: “As indicated before, between myself and the (Chief Audit Executive), we would work to insure that Mike Perry and Scott Keys and subsequently Blair Abernathy would be able to sign these….each of the respective items that are listed hereby ensuring that we had either provided them with appropriate documentation, support, information, et cetera to be able to evidence their….their review.”

Perry Attorney Razi: “At the top of the first page (of IndyMac’s disclosure controls checklist) right under the heading IndyMac Bancorp the company supports the notion of full and transparent disclosures. Do you see that? Was that a true statement?

IndyMac CAO: “Absolutely.”

Perry Attorney Razi: “Did Mr. Perry ever do anything during your tenure at IndyMac that suggested to you that he did not support the notion of full and transparent disclosures?”

IndyMac CAO: “No, he did not.”

Perry Attorney Razi: “Did Mr. Perry ever make any disclosures to shareholders that you considered to be false and misleading?”

IndyMac CAO: “None that I’m aware of.”

Perry Attorney Razi: “Did he ever ask you to make a disclosure that you believe was false and/or misleading?”

IndyMac CAO: “No, he did not.”

Perry Attorney Razi: “Did he ever ask you to omit information from IndyMac Bank’s disclosures that you believe would have been material to investors?”

IndyMac CAO: “No, he did not.”

Perry Attorney Razi: “That’s all the questions I have for you at this time.”

Keys Attorney Bruch: “….you’ve been a CPA for most of your adult professional life; is that right?”

IndyMac CAO: “That’s a true statement.”

Keys Attorney Bruch: “And when you were at IndyMac you worked with CPAs who reported to you?”

IndyMac CAO: “Yes.”

Keys Attorney Bruch: “I believe Mike Perry was also a CPA. Whether he was active or not I don’t know?”

IndyMac CAO: “That….I say I know he worked for one of what is now the Big 4 firms. I don’t remember whether he was a CPA or not.”

Keys Attorney Bruch: “Okay. Are you factual….generally familiar with the professional standards of the accounting profession on subordination of judgment?”

IndyMac CAO: “Yes.”

Keys Attorney Bruch: “Was there ever a time during your employment at IndyMac where you felt like you were in a position where you were asked to subordinate your best professional judgment?”

IndyMac CAO: “No”.

Keys Attorney Bruch: “Was there ever a time at IndyMac when anyone who worked for you who was a licensed accounting professional told you that they felt like they were asked to subordinate their best professional judgment?”

IndyMac CAO: “The answer to that is no and I would extend that to say that there was no one whether they were a CPA or not that…expressed that…..expressed those comments to me.”

Keys Attorney Bruch: “Okay. And in your dealings at IndyMac you had a significant role in dealing directly with the audit team at Ernst & Young; is that right?”

IndyMac CAO: “That’s correct.”

Keys Attorney Bruch: Was there ever a time where any member of the audit team at Ernst & Young questioned the ability to rely on the representations of Mr. Keys?”

IndyMac CAO: “None that I’m aware of.”

Keys Attorney Bruch: “And the same question. Was there ever a time where the audit team questioned the ability to rely on management representations of Mr. Perry?”

IndyMac CAO: “None that I am aware of.”

Keys Attorney Bruch: “Was there ever a time that they questioned the integrity of Mr. Perry?”

IndyMac CAO: “None that I am aware of.”

Keys Attorney Bruch: “I have no further questions. Thank you…”

Posted on August 30, 2012, in Postings. Bookmark the permalink. 1 Comment.

  1. Mike,

    This testimony is exactly what every seasoned senior manager at the bank would attest to.

    You always set a very high standard for financial reporting, often going well beyond the required disclosure standards of other institutions. I can recall your pressing for adoption of certain disclosure rules before the rules went into effect, and every senior manager is familiar with the control systems and processes that you put in place to ensure all material matters were subject to review for purposes of determining reporting/disclosure propriety (e.g. personally signing the quarterly representation that there were no material undisclosed matters of which we were aware, either in our own areas of responsibility, or in the company overall).

    You insisted on high standards of reporting and developed a culture of openness in financial reporting that is exemplary….any suggestions to the contrary are completely off base.

    Best, Mark Mark Nelson 3256 Sitio Tortuga Carlsbad, CA 92009 760.473.7558

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