CEO of Failed Alt-A Giant IndyMac Settles SEC Negligence Suit
Mike Perry, the chief executive at IndyMac before it was seized by the Federal Deposit Insurance Corp. in 2008, has agreed to settle the last remaining negligence claim against him by the Securities and Exchange Commission by paying an $80,000 fine.
The SEC, which had vowed last month to press ahead with civil fraud charges against Perry, instead agreed to accept the settlement and forego any appeals after U.S. District Judge Manuel L. Real of California's Central District gutted the government's case in several previous rulings.
Perry did not admit or deny wrongdoing in the case, which the SEC filed in February 2011. The settlement has already received court approval.
The final claim against Perry involved whether IndyMac and Perry should have disclosed additional details in 2008 about an $18 million capital contribution to IndyMac Bank.
In September, the judge ruled that IndyMac's public disclosures about its capital ratios were accurate and that the $32 billion-asset IndyMac had no duty to disclose details about a less favorable supplemental ratio for weighting subprime assets that the company had reported separately to its regulator, the former Office of Thrift Supervision.
In May, Judge Real threw out five of the seven SEC securities filings at issue. The judge also ruled in May that Perry received no ill-gotten gains from IndyMac, noting that he did not sell a single share of IndyMac's stock for years and actually invested another $3.6 million in 2007 and 2008. Perry was IndyMac's largest non-institutional shareholder and lost almost all of his $69 million investment in the company when it failed, his lawyers said in a press release Monday, announcing the settlement.
"The court's rulings speak for themselves," Perry's lawyer, D. Jean Veta, said in a press release. "The court ruled in Mr. Perry's favor on every claim that was presented to it."
Perry had tried to settle the case earlier "on reasonable terms," Veta said.
An SEC spokesman was not immediately available to comment.
During the housing boom, IndyMac was one of the largest alt-A lenders in the nation, according to figures compiled by National Mortgage News and the Quarterly Data Report.