IndyMac Bancorp Charged With Fraud
In a U.S. Securities and Exchange Commission (SEC) Press Release, the commission has charged three former senior executives at IndyMac Bancorp with securities fraud for misleading investors about the lender’s deteriorating financial condition. Former CEO Michael W. Perry and former CFO’s A Scott Keys and S. Blair Abernathy had all received internal reports detailing the firm’s deteriorating capital and liquidity positions in 2007 and 2008 but failed to disclose this to investors who were being sold new stock.
According to the complaints filed by the SEC, the executives made false and misleading statements about the firm’s financial condition in its 2007 annual report and early in 2008 when it announced that it would return to profitability and continue to pay preferred dividends in 2008 without having to raise new capital, when in fact they had begun raising new capital to protect capital and liquidity positions.
Abernathy has agreed to settle with the SEC by consenting to pay a $100,000 penalty, $25,000 in disgorgement and interest in the amount of $1,592.26. He also consented to the issuance of an administrative order suspending him from appearing or practicing before the SEC as an accountant, with the option to apply for reinstatement after two years. The Sec is seeking permanent injunctive relief against Perry and Keys, along with an officer and director bar, disgorgement of ill gotten gains with interest and a financial penalty.