Intentional Deception by WAMU? Should Fishman be prosecuted?
On Monday September 22, I went to move my funds out of WAMU into our local accounts. When I went to see the exact amount in our accounts, I noticed on the websites front page a note for our customers linked to this:
To Our Valued Customers:
September 22, 2008
As WaMu’s new chief executive officer, I am writing to discuss the extraordinary economic environment for all banks in the United States and why you can count on us to continue to serve you safely and soundly.
When I was recently approached about the opportunity to lead this great company, I did my homework to satisfy myself that WaMu has the capital, the liquidity, and the business plan to serve your needs and protect your money through these challenging times.
Let me explain why I felt good about joining WaMu.
All financial institutions have been affected by the turmoil in the mortgage and financial markets, but WaMu is very different from the investment banks, such as Bear Stearns, Lehman Brothers and Merrill Lynch, that you may have read about. Those firms have very different sources of funding than we do. WaMu’s business is funded largely through the deposits that customers like you put with us. We also borrow billions of dollars from the Federal Home Loan Banks system.
Most importantly, your deposits are insured to the limits established by the Federal Deposit Insurance Corporation (FDIC). (WaMu partners at your local WaMu store are happy to work with you to maximize your FDIC insurance coverage.)
Capital ratios describe the financial strength of a bank. Our ratios continue to be well in excess of the levels that government regulators require of “well capitalized” institutions. We also have an ample supply of funds on hand to meet your needs and the needs of our other customers and our day-to-day operations.
These strengths, combined with our tradition of superior products and services, are why we continue to welcome new customers every day.
I also expect that comprehensive and constructive plans recently announced by the government will shore up confidence in the U.S. banking system considerably. These plans, if approved by Congress, would remove up to $700 billion of troubled assets from the balance sheets of American financial institutions. There are also provisions to protect financial companies from disruptive rumors and speculation that are fueled by abusive stock trading practices.
Other government actions are already underway and are expected to lend even more security to the nation’s financial system. The Federal Reserve announced that it will open its discount window to financial institutions to enable them to purchase certain assets from money market funds. This provides increased financial flexibility. The Federal Reserve also recently granted requests from Goldman Sachs and Morgan Stanley that will allow them to take deposits, thereby increasing the resources available to both companies. A more stable national financial system is good for WaMu and good for customers.
I came to WaMu because I think it is a great bank with a strong franchise and a solid financial position. We take very seriously our role as the stewards of your hard-earned money. I want to personally thank you for your loyalty and the opportunity to serve your needs.
Chief Executive Officer
I thought maybe, just maybe, it was all a hype about them going under after reading the letter. Then last night I see this:
UNCLE SAM BROKERS DEAL FOR JP MORGAN TO BUY THRIFT
By ZACHERY KOUWE
Last updated: 8:30 pm
September 25, 2008
Posted: 8:30 pm
September 25, 2008
JPMorgan Chase boss Jamie Dimon won his bid for beleaguered banking giant Washington Mutual in a takeover orchestrated by the federal government that represents the largest banking failure in history.
The takeover of the nation's largest savings and loan will completely wipe out the company's shareholders and saddle taxpayers with some of the bank's toxic mortgage assets - a condition JPMorgan and other bidders insisted on before buying WaMu.
The Federal Deposit Insurance Corp. was expected to seize WaMu and simultaneously announce JPMorgan's takeover of most of WaMu's operations Thursday night.
Dimon has long coveted WaMu's valuable retail banking franchise, which includes $144 billion in deposits and over 2,200 branches.
With the takeover, JPMorgan can essentially pick up those assets on the cheap, though it appears Dimon won't get WaMu branches in New York City.
Sources familiar with the situation Thursday said that the FDIC had all but taken over WaMu's auction process, accepting bids from several suitors including Citigroup, JPMorgan and Wells Fargo.
While details of the bids could not be learned, one source said they differed in how much of WaMu's $227 billion book of mortgages they wanted the government to take on. As much as $30 billion of those loans are in danger of default.
WaMu CEO Alan Fishman and Goldman Sachs had been conducting their own auction in the hopes of either salvaging some value for shareholders or raising enough additional capital to continue as an independent company. But people close to the company believe that effort had been stymied by the government's decision to run what amounts to a separate auction.
Sources familiar with WaMu said it had received interest from private-equity titans Blackstone Group and Carlyle Group as well as Texas billionaire Gerald J. Ford. The company and its advisers were also working with their current shareholders Thursday, including TPG Capital, to raise additional funds, sources said.
TPG and others that injected $7 billion into WaMu in April will be completely wiped out as a result of the takeover.
As of two weeks ago, WaMu said it had $50 billion of available liquidity and expected to end the quarter "well-capitalized."
WaMu shares closed down 25 percent to $1.69.
I posted this last evening 09/25@ 9:47 EST
Question: Should Alan Fishman be brought before the Senate Banking Committee and the Securities and Exchanges Commission and FDIC for misleading investors?Should fraud charges be brought against him?
As a note- I am ok, this is not a poor me post to ramble about how I was taken advantage of, this is a post about how we deal with people giving intentional false information in a market crisis. Should Alan Fishman be prosecuted ?
The note to our valued customers about WAMU being secure is gone this (Friday 9/26) morning. In its place:
WaMu Customers, Welcome to JPMorgan Chase!
We're proud to welcome you to one of the nation's largest banks; as of September 25, 2008, JPMorgan Chase & Co. has acquired the deposits, loans, and branches of Washington Mutual. Your deposits remain insured by the FDIC and are now also backed by the strength and security of JPMorgan Chase. Our combined company will offer superior banking convenience - over 5,400 branches and 14,000 ATMs in 23 states. Here's what this means for you:
We look forward to serving you, and to introducing new products, services, and convenience in the coming months.
Tell me more* about the change to JPMorgan Chase.
I guess that is all Fishmans word is worth.