Ex-Washington Mutual executives settle FDIC suit

WASHINGTON (MarketWatch) - Three former executives of the failed bank Washington Mutual agreed to settle a civil lawsuit brought by the federal regulators, but the government received far less than it sought. The Federal Deposit Insurance Corp. said the settlement is worth $189 million, which is well below the $900 million the government sought in damages. The bank's estate would pay $125 million. The remaining $64 million would largely come from the bank's insurance, but the three executives would also pay a small amount and also forfeit claims for bonuses or other payments, according to FDIC officials. The former executives - Kerry Killinger, Stephen Rotella, and David Schneider - argued they could not be blamed for failing to predict the U.S. financial crisis that helped cause the bank's demise in 2008, a crisis regulators themselves did not anticipate. The collapse of Washington Mutual was the biggest bank failure ever in U.S. history.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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