Shareholders Fight Government Takedown of WaMu
02-01-2010, 08:08 AM
Shareholders Fight Government Takedown of WaMu
I don't know what you guys know about the obvious government take down of Washington Mutual or it's role in gifting the 300 billion dollar bank to JP Morgan Chase for 1.9 billion, but you should check it out.
For 15 months shareholders have been contacting members of the so called press, asking for help and as of now only 2 reporters have been of any help.
When trying to use Freedom of Information Act requests to get a hold of FDIC documents related to the seizure, nothing come back but blacked out docs. Here's a Pudget Sound Business Journal article showing them to you.
Now check this out.
In April of 08 JPM tried to buy WaMu for 8 bucks a share. As we later found out, they knew WaMu wouldn't take the offer. They just wanted access to their books. As of March 30th they were already plotting to wipe out Wamu shareholders to justify getting a government deal.
Wamu is suing JPM and the FDIC and they were granted discovery, which forced JPM to turn over documents and emails. This is an email specifying their plan to wipe out shareholders... 6 months before they took over the bank.
So how did JP Morgan pull it off?
First they made sure the SEC left Wamu off the no short sale list.
On July 17, Killinger, the CEO, sent a FAX transmittal, requesting to be added to the “no short” list and was refused. It is interesting to note the fax, which was received on the 17th was logged in as received 8:40pm on the 22nd by the "Chairman's Correspondence Unit".
The American Bankers Association, representing the interest of 8,500 banks, said in a letter to the SEC that it fears short sellers will now concentrate their efforts on banks that are not covered by the emergency order. They asked that the order be expanded to include stocks of all banks and bank holding companies. This request was also ignored.
Evidence of Damage Caused by Naked Short Selling: WAMU Stock Price vs. Failure to Deliver (FTD) of Securities
They then had the FDIC pressure the OTS to seize the bank. Note, Sheila Bair told the press it was bank runs that caused them to fail while the OTS press conference claimed it was bad loans.
The official OTS fact sheet states the following:
"With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business."
The only problem with that is that it's now come out the Wamu had 29+ billion of it's own cash on hand and had the option to borrow up to 30 billion more from the Fed. They were moving the 20 billion from a subsidiary to Wamu bank when they were seized. Remember, it was seized on a Thursday and not a Friday as almost every bank seizure in history has been done.
29 billion in cash- Video
Seizure on Thursday/Leak to MSNBC- Video: This is important because Bair claimed they had to act on Thursday because of media leaks. According to this video, not even Wamu knew yet. So, either JPM/FDIC/or OTS officials leaked it, to justify seizing the bank before they could move the 20 billion in cash from the subsidiary to the main bank.
I could go on and on and on...
Believe it or not, the court docs tell a sorted tale of moles and corporate espionage, collusion between a multitude of government agencies and JP Morgan, violation of confidentiality agreements, leaking false information to the press, presentations made to credit ratings agencies (made my JPM) as they persuaded them to lower Wamu's credit rating to cause a panic... etc etc... I'm not making this up. It's in the docs.
But what's important is that JP Morgan and the FDIC are close to settling with Washington Mutual's former holding company. They left a paper trail a mile wide and they will settle or take down the entire US financial system as the SEC, Fed, OTS, and FDIC are exposed in all of this.
The holding company was trying to wipe out their shareholders who already lost just about everything already. They appear to have been trying to cancel the stock prior to a deal being reached so they wouldn't have to share the settlement with shareholders and so they could in theory sell new stock, or reap the rewards of a clean buyout by JP Morgan. JPM would do this because regardless of what they claim, they were in breach of copyright and intellectual property law for about a year, running around with the Wamu logo and name without permission from the holding company who owned the patents... amongst other serious issues.
So through Internet message boards and websites the shareholders put together this massive repository of facts and documents proving their case called "WaMu Story". Then set out to create an equity committee so they could be heard in court, to hopefully keep the holding company from wiping them out before a settlement.
As of Thursday 1/28- They now have that voice as a motion to have them dissolved was officially shot down in the bankruptcy court.
As you all know, the Internet has got to remain a vestige of free speech. This is just one case of many where people used the net to come together and work together to TRY to put the pieces of something unsavory together and to fight for the right to redress their grievances.
If you'd like to know more about the Wamu stuff I'd tell you to check out:
And seriously, we could use your help. The latest video I put together for these guys is:
Above all else we want people to know that we NEED to fight for the Internet and against any censorship thereof. We have no idea if these guys are going to be able to get their money back. But the lesson to be learned is that the Internet allows us to come together and fight through the proper channels that can force very powerful people to hear us. The mass media won't touch the story, but they've got a voice in court in the biggest "bank failure' in US History.
Please pass that video around, even if you couldn't care less about Wamu or its shareholders, it should be an inspiration to everyone that the Internet is ours and it needs to remain unfettered so that we, the little people can come together with a BIG VOICE.
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