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The FDIC filed this complaint against Wa Mu directors and their wife's yesterday. The wife's were included because they accepted property that the directors conveyed to them prior to being seized by the FDIC. Wa Mu executives behaved badly but its hard to understand how their bad behavior differed from that of other executives that headed up banks that needed to be rescued by the government. The SEC decided not to pursue charges against the heads of failed Wall Street banks, e.g. Lehman, because the suits are expensive to bring to trial and because they are difficult to win. Perhaps the FDIC expects that the case will be settled out of court and they will collect some revenue from the insurance companies who provided them with director insurance. Ironically, Wa Mu was regulated by the FDIC. If the executives were taking risks that endangered the firm, what is their responsibility?
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