New York, NY: -Washington Mutual Inc has agreed to settle a large securities class-action lawsuit for $208.5 million. The suit was the consolidated version of several other class action lawsuits filed by shareholders, in multiple courts, that all essentially alleged that Washington Mutual failed to stop them from investing when the now-failed bank knew, or should have known, how much trouble it was in. Some of the lawsuits were actually filed long before the bank collapsed, though the plaintiffs regularly updated the consolidated case to include the latest reports on Washington Mutual.
Washington Mutual collapsed in September 2008, the largest U.S. bank failure in history. Most of its assets were purchased by J.P. Morgan Chase & Co.
An amended complaint filed in early 2009 said WaMu "was seriously mismanaged and faced seriously deteriorating financial circumstances that rendered WaMu stock an unduly risky and inappropriate investment option for participants' retirement savings."
The plaintiffs, which had alleged they lost hundreds of millions of dollars by buying into the common stock and taking part in various offerings from Washington Mutual, alleged the bank and its executives made false and misleading statements to keep investors engaged.
Thursday, the Ontario Teacher' Pension Plan Board, the lead plaintiff in the suit, requested the judge in the case approve the settlement, which it called "an excellent result."
The filing said the plaintiffs and WaMu had been through three years of "vigorously litigated" actions before coming to this point. The lawyers had informed a judge earlier this month that they were close to reaching a deal, and the judge gave them until June 30 to finalize the settlement.
