Indymac Depositors Sacrificed for Hedgefund Manager’s Profits?
Summary: Insurance limits have been raised, the OTS has disclosed errors in booking capital, the FDIC has refused to make its communications practices more transparent, and hedge fund manager and potential IndyMac acquirer John Paulson has recommended increased liquidity for the full return of capital to hedge fund investors 10,000 IndyMac depositors have approached Paulson to be heard.
Emeryville, CA, December 31, 2008 – 12 noon EST
After many months of fruitless lobbying the FDIC and learning of the Treasury investigation of OTS regulator Darell Dochow’s decision to allow IndyMac to backdate an infusion of capital from May to March 2008 to keep the bank off the watchlist, IndyMac depositors who lost 50% of their uninsured funds are putting their situation before one of IndyMac’s potential buyers, hedge fund manager John Paulson, to ensure the sale of the bank pays attention to their situation.
“When John Paulson, whose $13-billion Paulson Advantage Plus fund has risen some 38 percent through Dec. 19, testifies before Congress on the wisdom of the $700 bailout and states clearly in his 2009 outlook that hedge fund managers should raise enough liquidity to cover all the redemption requirements of their investors, we want to be heard,” says Fran Quittel, technology recruiter and business journalist, who has lobbied the FDIC for months now regarding changes to make their communications practices more transparent and depositor friendly. “We’ve been in touch with Paulson’s spokesperson Armel Leslie and are awaiting his reply to see if we can also be made whole in this transaction and if not, why not, particularly since we were cash depositors and not shareholders, investors or traders of any sort.”
In fact, Quittel is only one of several IndyMac depositors who have sprung into action to protest the handling of the bank’s takeover and current sale. “That we have received no attention from the FDIC since this started, and this sale is being done in the week between Christmas and New Year’s is yet another example of how the entire matter has been handled,” says Lisa Marshall, creator of http://www.indymacdepositors.com/, a site where uninsured depositors who have lost funds are flocking to post their stories. The sale, if and when it happens, will ensure that the FDIC – but not the 10,000 uninsured depositors – are repaid first for any funds expended in the takeover.
On July 11, the Office of Thrift Supervision (OTS) closed IndyMac Bank and appointed the Federal Deposit Insurance Commission (FDIC) receiver. Depositors who held one or more accounts totaling more than $100,000 per depositor had funds in excess of the limit reduced by 50%. In October of 2008, FDIC insurance limits were raised to $250,000 per depositor per institution until December 31, 2009, with additional protections provided non-interest bearing business payroll accounts, some of which had also been reduced by 50% in the IndyMac failure. On December 22, 2008, Eric Thorson, Inspector General of the US Treasury, reported to Senator Charles Grassley, the ranking Republican member of the Senate Committee on Finance, that OTS regulator Darrell Duchow had allowed IndyMac to backdate an $18 million infusion of capital. News of the pending sale of IndyMac bank was tentatively announced on Christmas Eve. Congress is planning hearings on IndyMac beginning January 7, 2009. IndyMac's group of uninsured depositors is asking to be included in those hearings.
Information on IndymacDepositors.com (http://www.indymacdepositors.com/), communications to Congress and the many efforts expended to improve FDIC communications to depositors can be obtained through:
CONTACT: Lisa Marshall - 310-344-4098, indymacdepositors@gmail.com creator/http://www.indymacdepositors.com/ Hamir Bhatia - 714-269-0252, acsvision@hotmail.com Fran Quittel - 626-864-1400/cell, francq@aol.com, http://www.fdicbusinessalert.com/
Uninsured depositors can join the effort by going to http://www.indymacdepositors.com/. Members of Congress responsible for banking and finance include: . Representative Barney Frank . Senator Christopher Dodd . Senator Chuck Schumer . Senator Charles Grassley California senators contacted by IndyMac depositors are Dianne Feinstein and Barbara Boxer. Contacted representatives include Barbara Lee, Jane Harman, Henry Waxman, and Adam Schiff.
Congress needs to listen to the working people that got hit by this failure. We are mothers, grandparents, small business owners. We are the potential consumers that would help reboot our economy.
ReplyDeleteIt's an important distinction that we received the wrong information from Indymac when our accounts were set up making our deposits 'uninsured'. This makes it a case of fraud rather than just common incompetence.
What do we need to do to be a included in the Congressional hearings? Also, what can we do to block the sale until these hearings are complete?
ReplyDeleteAnd now that the sale is finally ready to go through it gets held up because Fannie Mae wants $1 - $10 BILLION from Indymac.
ReplyDeleteIf Fannie gets their money it will come out of any remaining profit that could have been given back to the depositors that lost money!
According to the Washington Post Fannie Mae wants the money due to fraud by Indymac: "the underwriting was so poor, there was a lot of fraud that happened -- or a total misrepresentation."
Fannie Talking to FDIC About IndyMac Mortgage Buyback
So more fraud and wrong doing by Indymac on the mortgage side. WHO PAYS??? The honest depositors on the banking side!
Fannie tries to get money, the FDIC gets their money, other banks get bailed out with TARP funds, other depositors are insured to 250K...
HONEST depositors that believed their bankers and gave them their money for safe keeping get ROBBED!
How could the OTC have left this corrupt organization go unchecked for so long? Had they stepped in before the Schumer run on the bank the FDIC could have pro-actively sold the bank instead of leaving all of the honest depositors out in the cold.
WE NEED SOMEONE TO HEAR US - TAKE OUR SIDE AND HELP US GET JUSTICE
Thanks to everyone at "IndyMac Depositors" for all your help trying to get this issue the attention it deserves.
Linda Buquet
(I am a single 56 year old woman who lost $95,000 due to bad information from Indymac regarding FDIC insurance. They said one depositor with 2 POD was covered at 300,000. That was incorrect, they only cover to 200,000. So I lost a majority of my life savings.)
I called the FDIC last week after hearing about the possible sale of the bank. I specifically wanted to know if the FDIC received any of the funds from the sale of the assets ahead of the depositor's. The agent in Texas told me no and that their 9 billion dollars that the closing of Indymac had cost the FDIC would be absorbed by the insurane fund. I was told the depositor's should be first in line to receive any payment as is indicated on their website.
ReplyDeleteNow as I read other articles it looks as though the FDIC pays themselves back some of the proceeds from the sale first! More wrong information being given out at all levels.
Marc