Insider Trading Named by JAOC

The Fall of Washington Mutual and Insider Trading Allegations

I will name the insider who was pivotal in JP Morgan's purchase of 1.9 Million dollars on 104 Billion assets so liquidity was not the issue it was political. The name will not surprise you.

The collapse of Washington Mutual (WaMu) stands as one of the most notable events during the 2008 financial crisis. With roots as one of the largest savings and loan associations in the United States, WaMu's dramatic downfall was a harbinger of the broader economic turmoil that was unfolding. This blog delves into the factors behind WaMu's failure and the insider trading allegations brought forward by financial analyst Mike Stathis.

The Rise and Fall of Washington Mutual

Washington Mutual was founded in 1889 and grew to become the sixth-largest bank in the United States by the early 2000s. Its aggressive expansion into subprime mortgages and risky loans fuelled its growth. However, these same risky financial products became its undoing when the housing market crashed.

As the housing bubble burst, WaMu faced a massive wave of mortgage defaults, leading to significant financial losses. By September 2008, the bank's financial stability was in jeopardy, causing a loss of confidence among depositors and investors alike. On September 25, 2008, the Office of Thrift Supervision (OTS) seized WaMu, marking the largest bank failure in U.S. history. The Federal Deposit Insurance Corporation (FDIC) then sold WaMu's banking operations to JPMorgan Chase for $1.9 billion.

Insider Trading Allegations by Mike Stathis

Amid the chaos of WaMu's collapse, financial analyst Mike Stathis brought forward serious allegations of insider trading. Stathis, known for his critical views on Wall Street practices, filed a formal complaint with the Securities and Exchange Commission (SEC) shortly after WaMu's seizure.

Stathis' allegations centered on claims that several Wall Street firms and hedge funds engaged in illegal naked short selling of WaMu's stock. He asserted that these firms conspired to drive down WaMu's stock price before the bank's seizure. Furthermore, Stathis alleged that a WaMu executive had tipped off a reporter about the impending seizure just hours before it occurred, providing an unfair advantage to certain investors.

The Aftermath and Implications

The collapse of Washington Mutual and the subsequent insider trading allegations raised significant questions about the regulatory oversight of financial institutions and the practices of major Wall Street players. While the SEC investigated these claims, the broader issue of accountability in the financial sector remained a topic of intense debate.

In the years following the financial crisis, reforms such as the Dodd-Frank Wall Street Reform and Consumer Protection Act were introduced to increase transparency and prevent the kind of risky behaviour that led to the downfall of institutions like WaMu. However, the legacy of WaMu's collapse continues to serve as a stark reminder of the potential consequences of financial mismanagement and unethical practices.

Conclusion

The story of Washington Mutual's failure is a complex tale of rapid growth, risky financial decisions, and the harsh realities of the financial crisis. Mike Stathis' insider trading allegations added another layer of intrigue and controversy to an already dramatic chapter in financial history. As we look back on these events, it is crucial to learn from the past to ensure a more stable and transparent financial future.

When Washington Mutual (WaMu) collapsed in 2008, the board of directors faced significant challenges and responsibilities. Here's what some of the key board members did:

1. Kerry Killinger: He was removed as CEO on September 8, 2008, just weeks before the bank's failure. After the collapse, he largely stepped away from the banking industry and focused on philanthropy and writing.

2. Alan H. Fishman: He was appointed as CEO on September 8, 2008, replacing Kerry Killinger. Fishman's tenure was brief, as the bank was seized by the Office of Thrift Supervision (OTS) on September 25, 2008.

3. Charles Lillis: He continued his involvement in various business ventures and philanthropic activities.

4. James Stever: He remained active in the business community and continued his work in various capacities.

5. William H. Gates, Sr.: He continued his philanthropic efforts through the Bill & Melinda Gates Foundation and other charitable activities.

6. Dorothy C. Johnson: She remained involved in various community and philanthropic activities.

7. William H. K. Polley: He continued his work in the business and philanthropic sectors.

8. David A. Straus: He remained active in the business community and continued his work in various capacities.

9. H. Edward Deming: He continued his involvement in various business and philanthropic activities.

William H. Gates, Sr. was a significant figure on the board of Washington Mutual (WaMu). Joining the board in 1999, his role was pivotal during a period of considerable growth and subsequent challenges. 

Governance: As a board member, Gates Sr. was involved in overseeing the bank's strategic direction and governance practices. His legal background and experience provided valuable insights into regulatory and compliance matters.

He was the person whom was noted for insider trading but no charges were brought due to Mike being leaned on heavily by the FBI but it s now clear he was the person involved.

There is an even bigger story on how this relates to the link with hidden history and more to follow on this investigation coming soon.