Compliance July 18, 2008

Law Firm Gears Up for Potential IndyMac Suit

Class action law firm Keller Rohrback kicked off an investigation of allegations that IndyMac Bancorp executives breached their fiduciary duties by keeping company stock in their 401(k) plan when doing so was no longer prudent.
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A Keller Rohrback news release said the probe of potential Employee Retirement Income Security Act (ERISA) violations focuses on the IndyMac Bank, F.S.B. 401(k) Plan.

The firm said it is looking into “specifically, (whether) IndyMac continued to make and maintain investment in IndyMac stock despite the company’s apparent mismanagement of the risk of assets held by the company and its gross failure to maintain adequate capital and liquidity.”

The U.S. Office of Thrift Supervision (OTS) closed the Pasadena, California.-based IndyMac and turned it over to the Federal Deposit Insurance Corp. (FDIC).

The move represented the biggest bank failure in years, as IndyMac is the second-largest mortgage lender in the United States and the seventh-largest savings and loan, with $32-billion in assets and $19-billion in deposits.

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