IndyMac became infamous for lending to homeowners with such abandon that it ended up in a multi-billion dollar bankruptcy. On Friday, a jury agreed with the Federal Deposit Insurance Corp.'s contention that its residential construction division also acted recklessly.
The verdict, in U.S. District Court for the Central District of California, declared three former IndyMac execs culpable for more than $168 million in loan losses. The decision may prove pivotal to the FDIC in recouping a small portion of the more than $12 billion of losses it suffered in the wake of the lender's bankruptcy. The men's liability for the bank's mistakes allows the FDIC to pursue insurance claims involving policies protecting them against findings of negligence.