For sheer regulatory gall, it's hard to top the FDIC's lawsuit against Washington Mutual executives and their wives. This is a company, remember, that was seized and sold at a bargain price to JP Morgan Chase. As one of the executives being sued, Kerry Killinger, testified before the Financial Crisis Inquiry Commission:
The unfair treatment of Washington Mutual did not begin with its unnecessary seizure. In July 2008, Washington Mutual was excluded from the "do not short" list, which protected large Wall Street banks from abusive short selling. The Company was similarly excluded from hundreds of meetings and telephone calls between Wall Street executives and policy leaders that ultimately determined the winners and losers in this financial crisis. For those that were part of the inner circle and were "too clubby to fail," the benefits were obvious. For those outside of the club, the penalty was severe.
As is often the case, the commenters on the Wall Street Journal Web site have more interesting takes on the news of the lawsuit than do the news reporters. Writes on commenter, "I love the how the feds pick winners and losers and then have the nerve to stomp on the grave of the losers they picked! The audacity of the dope to prosecute bank execs and their wives while not pursuing; Chris Dodd, Franklin Raines & Barney Frank. At least the Bank execs had board members and share holders to answer to. Who does the FDIC answer to ? Not the people nor congress." Writes another: "Seems ridiculous to go after WaMu execs when this is one of the only 'failures' that did not result in a charge to the FDIC fund. Chase picked up the firm for a bargain and posted record earnings the following quarter."