Pension Funds’ WaMu Suit Deemed a Class Action

October 14, 2010 ( – A suit filed by five pension funds against Washington Mutual Inc., the former owner of the biggest U.S. bank to fail, has been declared a class action.

A Bloomberg news report said the named plaintiffs in the case include Ontario Teachers’ Pension Plan Board and four other pension groups. U.S. District Judge Marsha Pechman appointed the New York-based law firm Bernstein Litowitz Berger & Grossmann to lead the plaintiffs’ case.

According to Bloomberg, the pension funds’ lawsuit consolidates more than 20 cases filed against Washington Mutual that claim the bank secretly lowered lending standards, artificially inflated home-price appraisals, and did not disclose its deteriorating financial condition when the loans began to fail.

The class includes tens of thousands of shareholders who lost money on three types of preferred stock purchased between October 2005 and July 2008, and certain securities offered by the bank in 2006 and 2007, Bloomberg reported.

WaMu filed for bankruptcy September 26, 2008, the day after its banking unit was taken over by regulators and sold to JPMorgan Chase for $1.9 billion. Before it failed, Washington Mutual Bank had more than 2,200 branches and $188 billion in deposits, according to the Bloomberg report.