2008-11-01 06:49:56 - WAMUQ.PK, WAMUQ, WAMU, Washington Mutual, JPM, JP Morgan

Contact: Michael Rozenfeld
Tel: + 1 512-809-8556
Email: Mike@WamuRape.org


Houston TX- Washington Mutual Bank (WAMU) shareholders are uniting to challenge the actions of the FDIC (the Federal Deposit Insurance Corporation) and JPM (JP Morgan) prior to the seizure of Washington Mutual bank. Shareholders contend: 1) that these actions were unjustified 2) that they were unethical 3) that Washington Mutual Bank was not failing. As evidence of our claims, reports now surfacing indicate the liquidity of the bank was much better than the public was led to believe; by most accounts, the bank had enough funds to cover the withdrawals by depositors. Washington Mutual executives knew these facts; however, their claims made days before the seizure that the bank was in good health

were ignored. We the concerned shareholders of WAMU contend that the FDIC was not right in doing so and has caused irreparable harm to the WAMU stockholders, to the banking community and to the markets in general. As a result of this action, shareholders of thousands of companies throughout the world have lost trillions of dollars since.

The FDIC seized Washington Mutual Bank saying there had been a bank run amounting to 16.7 billion dollars in 10 days. The reason this money was withdrawn from the bank is unknown. The FDIC saw money moving out of larger accounts and assumed a run was in progress. Just 2 weeks before the FDIC seized the bank WAMU had worked out a solid business plan with the OTC (Office of Thrift Supervision). At the time of seizure, WAMU had access to $50 billion in assets: sufficient liquidity to handle all their obligations. The situation, however, seemed different to the FDIC, whose reserves were low as a result of not collecting insurance premiums from 1996-2006 and the bank failures in the previous weeks. Appointed officials at the FDIC were concerned that if the failure of Washington Mutual was followed by other bank failures as well, the agency would not be able to handle the situation. Despite this concern, the FDIC had the ability to borrow $30 billion from the Federal Reserve; however, for some reason it did not do so. The FDIC's move was more about protecting the federal deposit insurance company than about protecting the insured.

In short, the FDIC acted prematurely, behind closed doors. The Washington Mutual Executives had no prior knowledge of the FDIC's plan. In fact, at the time of the seizure WAMU was in the midst of sale negotiations with several other banks, and had been given no deadline by the FDIC to find a buyer. Despite WAMU's good-faith efforts to find buyers, banks which were contemplating buying Washington Mutual had been notified by the FDIC that the FDIC was to auction off the bank, again without WAMU's knowledge. This FDIC action prevented a sale from being made. Even worse for WAMU, behind closed doors, the FDIC was offering prospective buyers a much sweeter deal than the ones WAMU was negotiating. The FDIC arranged for JPMorgan to purchase the $300 billion dollar corporation for the bargain price of 1.9.

The FDIC needs to be held accountable for its short sighted action which has caused havoc throughout world markets. The FDIC had many options in the event that WAMU faltered. The option chosen, seizing the bank and selling it overnight for a miniscule fraction of its value in a clandestine deal with JPMorgan, was the worst of any options they had. Did the FDIC act appropriately? Most shareholders don't think so and they want the FDIC to answer for that.

The result of the FDIC's hasty and secretive action was that the shareholders of Washington Mutual Bank lost billions of dollars. Shareholder portfolios were emptied overnight - because of collusion between the FDIC and JPM in weeks leading up to the seizure. Now, shareholders seek redress.

Never has the law been applied with such disregard for its intention. Government regulators, supposedly the ones responsible for protecting us, circulated insider information about the bank to its competitors and precipitated a catastrophic collapse whose repercussions are still being felt today.

Coincidentally, JPMorgan has been the institution which has profited handsomely from these failures. Coincidentally, the former head of the SEC (Securities and Exchange Commission) whose role is to oversee stock trading, works at JPMorgan, and this week was accused of private conversation causing difficulties that may have resulted in another recent bank failure, that of Bear Stearns. JPMorgan has also been accused of interfering in Lehman Brothers access to $5 billion dollars which helped catapult their demise. And the company has been accused of denying WAMU access to $5 billion dollars they had on deposit with JPMorgan.

Is this coincidence? We think not. We demand the FBI and the legislature thoroughly investigate the relationships and actions of the OTS , the FDIC, the SEC and JPMorgan management. We do understand that the government is currently investigating Washington Mutual, but we contend these other institutions need to be investigated as well.

One of our goals is that the assets or at least the asset value of Washington Mutual be returned to the stockholders, just as they were in the lawsuit filed by First City Bancorporation in 1992. In that suit, (1993) the FDIC was forced by the courts to return 145 million dollars to creditors and depositors, after the seizure of that bank and its assets. The same situation happened here. Consequently, WAMURAPE.ORG members feel that there seems to be legal precedent for holding the FDIC accountable for their actions. Holding the FDIC accountable is exactly what the members of WAMURAPE.ORG intend to do.

The primary action that our organization is currently recommending is contacting the bankruptcy judge.
Please postmark a polite letter to the judge describing your outrage and personal story regarding Washington Mutual:

The Honorable Judge Mary F. Walrath
United States Bankruptcy Court, District of Delaware
824 North Market Street
5th floor
Wilmington, Delaware 19801

Ref: Washington Mutual Inc., Debtor Case No. 08-12229

Each letter enters the court record officially and helps ensure that we, as individual shareholders, have a voice.

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For additional information on the news that is the subject of this release, please contact Michael Rozenfeld or visit www.wamurape.org , an organization devoted to defending shareholder's interests and American justice.
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