Mr Cooper Group Inc (COOP)

[Vulcanized Crawler]

Dear Panel Members,

As your panel requests testimony from bank CEO’s, Federal Regulators and other financial experts, we would like to make your members aware of recent investigations by the journalistic community, disclose documents and events that have taken place in the Delaware Bankruptcy court system, and provide insight to how the common retail shareholders view the events of 2008.

This letter is not written in hopes that your committee members will depose those who testify but is written in hopes that your members will understand the history and what we see as inconsistencies in the treatment of banks due to cronyism, relationships that exist between banking regulators, the FED and bank CEO’s. This crony atmosphere is further extended to craft a “New York” banks vs. “other” banks mindset, with the characterization that some banks are systemically important while others are not.

We feel that recent discoveries show that the relationships have and can be used for harmful actions, even extending beyond favoritism and may have prejudiced the decisions of federal regulators and banking CEO’s.

In addition we hope that you include Washington Mutual’s treatment in the scope of your inquiry. Far too often, our politicians and media focuses on Lehman Brothers because it was a “New York” investment bank and overlooks WaMu. After reading this letter and related articles, you may agree Washington Mutual was the subject of one of the largest banking coups in history and appears that it may have been accomplished in an underhanded and possibly illegal manner with the assistance of the FDIC. This statement is supported by the Bankruptcy case of Washington Mutual. (1)(Source: Case No. 08-12229 (MFW), U. S. Bankruptcy Court for the State of Delaware)

This letter will focus primarily on JP Morgan Chase and Washington Mutual Bank as these two banking institutions have been closely followed by Washington Mutual Inc (WMI) stockholders for more than a year. However, it is necessary to follow the activities of the larger institutions while keeping in mind that the financial crisis essentially covers the 2005-2008 years, this encompassing view supports our contention that not only is regulatory reform required, but ethics reform is required as well. There must be a firm and in-depth look at the relationships that exist between our public regulators and private banks.

During the 2008 financial crisis, many large banks/financial institutions were in the spotlight, some institutions failed, others were saved, while others weathered the storm and actually did well. While it would be easy for us to look back and second guess the decisions made - that is not within the scope of our investigations. Our scope is to point out the decisions that appear to be calculated with an ulterior motive in mind. The best way to do that is to follow the money trail and look for “deals” that are/were so one-sided, so unexpected, that they (by their mere existence) require detailed and thorough inspection. Some of the data necessary to do that is unavailable to the general public. Some of the institutions in the media spotlight were Goldman Sachs, Morgan Stanley and Lehman Brothers as unregulated investment banks. Barclays, Bear Stearns, Citigroup, JP Morgan Chase and Washington Mutual were also highlighted as commercial banks, there was inconsistent handling of the institutions and their futures and that has been the focus of many who want reform that includes:

a) holding banks accountable for responsible handling of risk,

b) holding them accountable as leaders in our financial communities,

c) ensuring that all financial institutions have a level playing field,

d) ensuring banks cannot take advantage of the public.

As an example of why reform is needed: Recently, it is noted that after improperly handling loan packages, not informing the loan recipients of the consequences of using certain loan packages, and in some cases falsifying information so that people who did not qualify for loans had their personal data altered by the banks in order to qualify, banks have raised interest rates on responsible credit card holders, far beyond what could be considered reasonable (18-20% in many cases). The proper course of action in any other business would have been to decrease salaries, limit bonuses, and find other ways within the companies to “shave” expenses to make up the deficit.

The point of the above paragraph: To show that banks have not shown that they take any responsibility for their actions, and those decision makers who allowed the crisis to happen have not been held accountable in any way. They continue getting exorbitant salaries and bonuses, far in excess of what a reasonable salary for their positions should be. They are again abusing their position, and taking advantage of the American people.

In October of 2008, Goldman Sachs (and Morgan Stanley) received $10 billion preferred stock investment from the U.S. Treasury as part of the Troubled Asset Relief Program (TARP). In June 2009, Goldman Sachs repaid the U.S. Treasury’s TARP investment, with 23% interest; the payments consisted of preferred dividend payments and some $1.418 billion in warrant redemptions. It is worth noting that on September 21, 2008, Goldman Sachs along with Morgan Stanley became traditional bank holding companies bringing an end to “investment banking” on Wall Street. One can only assume they did this to further protect themselves, by enabling them to receive TARP funds.

Much of the public outcry with respect to Goldman Sachs and Morgan Stanley was related to continued “bonus” payments even when the institutions were being propped up with TARP “taxpayer” funds. To Goldman Sachs credit, they did answer the public outcry in 2008, but immediately restored the bonuses in 2009 as stock options with ‘clawback’ provisions. (2)(Source: USA Today, December 11, 2009 “Goldman execs to forgo cash bonuses for '09, will get stock”)

While the public outcry was with respect to executive bonuses – those in the know (shareholders and other investors such as funds and other institutional investors) saw a fundamental shift/benefit to Goldman Sachs who not only benefited from the ‘forgiveness’ model, wherein poor investment strategies prior to the financial collapse, allowed GS to collect significant profits while taxpayers paid for the risk when GS nearly collapsed. Recent reports indicate that GS (and other New York banks, specifically JP Morgan Chase) may have used its new found positions as ‘favored’ banks to rid themselves of competing institutions. (3)(Source: Esquire, September 11, 2009 “Deal of the Century”)

Certainly most would agree that cronyism exists, creating a network of insiders (creating sublimely obvious conflicts of interest), where the ‘boys of high finance’ float in and out of CEO positions, hedge fund positions, Federal Reserve positions and political positions, using their connections to favor institutions that they were previously employed. James Dimon is the CEO of JP Morgan and sits on the Board of Directors of the New York Federal Reserve Bank, but no one seems to point out this obvious conflict of interest. It should be considered a conflict of interest for bankers currently employed at banks to also sit on the Federal Reserve. Many average citizens and retail investors refer to this network as “the cartel”.

It’s worth pointing out that in a “Free Capitalistic Market” these position changes would have little effect on the market as a whole, but that is not the case when these individuals move in and out of government positions that allow them to be lobbied by lobbyists and ‘connected friends’ etc. In positions that allow for the construct of financial policy, people who are “connected” should not be permitted to hold these positions. This becomes dramatically important when the country is in turmoil and subject to aggressors masquerading as saviors. As an example, and as a matter of simple business ethics, we feel that at no time should Mr. Paulson have been allowed to suggest, implement or control funds and/or policies that assisted (or could be presumed to assist) his ‘alma mater’, Goldman Sachs. We realize it is difficult to find qualified people to hold these positions who are not ‘connected’ to banking institutions, but those people do exist, and it is imperative for an objective viewpoint, that these ‘unconnected’ people be employed by the government in such crucial positions. Many of the activities of both the FDIC, the OTS, and the Federal Reserve seem unethical when you review all of the ‘connections’ and the things that happened, which favored some institutions over others.

Mr. Paulson was in a position to assist Goldman Sachs and Mr. Paulson had unchecked power ostensibly used to influence deals that benefited GS other than transferring ‘cash’ openly on the balance sheet, in transactions that would not fall under the normal taxpayers scrutiny.

Mr. Paulson had the ability to simply ignore the needs of competitors of GS’s and he could do so without explanation. He could do this ‘under the radar’ and do so under the guise of ‘saving the financial network of the country’. Furthermore, we’re concerned that these individuals feel that they do not have to answer to legislative inquires nor allow their ‘quasi-government’ agencies to be audited, often using their ‘quasi-government’ status to avoid tough questions, to muddle their legal, ethical and legislative requirements. Lastly, we would like to point out that Mr. Paulson’s department oversaw the FDIC and the OTS, the OTS of course was in charge of regulating WaMu and hundreds of other banks. No one should have that unbridled power and should be required to have direct approval from the President over such grave matters. The President should be well informed about any conflicts of interest or potential appearance of impropriety.

Members of the commission, this is a story that is so appalling, that it highlights the harmful tenets of cronyism, resulting in egregious manipulation of our financial system. It is so prevalent that we, as a collected group of thousands of shareholders, are surprised that it took over a year to finally see news stories that exposed the corruption, especially when we noticed it within weeks of the seizure. We were labeled as ‘conspiracy theorist’, as ‘sore losers’ when we voiced our opinions in public. Recently, reporters are finally doing enough in depth investigation that they bear out what we have contended all along and to my knowledge, the JP Morgan WaMu deal has never been investigated by a committee nor a stage Attorney General office. (4)(Source: The Puget Sound Business Journal, December 28, 2009 “What a Deal” and “Why did regulators close WaMu?”)

The story is finally being revealed even though we are being kept in the dark due to 100% redacted documents with respect to FOIA requests by the FDIC and OTS and complete denial of some FOIA requests. The Bankruptcy case of Washington Mutual Inc. and the 2004 discovery rule has begun to reveal the true facts behind this hostile and calculated coup. As we write this letter to you, Bankruptcy court subpoenas are being planned for the Federal Deposit Insurance Corp. (Sheila Bair), the Office of Thrift Supervision (OTS), the U.S. Treasury Department (Henry Paulson), the Federal Reserve, other banks that considered buying Washington Mutual, Goldman Sachs in its capacity as an adviser to WaMu, credit-rating agencies (Moody) and other banks involved in lending to WaMu. We are getting closer to learning the truth and I expect you will too, but only if you look deep enough. I encourage a comprehensive investigation into the Washington Mutual seizure, from the standpoint of it being a hostile takeover, with probable illegal acts, assisted by the very regulating body meant to protect banks—the FDIC.

We now come to Goldman Sachs, Barclays, Lehmans, JP Morgan and Washington Mutual:

The deals that were struck between all the large financial institutions were made to temper the financial meltdown and to encourage the flow of money - at least that was the public was led to believe, but there was also an epic battle for power being waged between the institutions and recent discoveries indicate that the playing field was not fair, in fact, according to some investigative journalists, the rules of the playing field changed, were modified or ignored based apparently on the whim of the federal regulator and the bank to which the rules were being applied.

In March, 2008, JP Morgan Chase, in conjunction with the Federal Reserve Bank of New York, agreed to provide a (up to) 28-day emergency loan to Bear Stearns in order to prevent a market crash that would result from Bear Stearns becoming insolvent. Days later, on March 16, 2008, Bear Stearns signed a merger agreement with JP Morgan Chase in a stock swap worth $2 a share or less than 10 percent of Bear Stearns' market value just two days before. This sale price represented a staggering loss as its stock had traded at $172 a share as late as January 2007 and $93 a share as late as February 2008. In addition, the Federal Reserve agreed to issue a non-recourse loan of $29 billion to JP Morgan Chase, thereby assuming the risk of Bear Stearns's less liquid assets.

The Fed, Bear Stearns and JPM deal netted JP Morgan Chase all of the assets of Bear Stearns and an additional $29 Billion in a non-recourse loan - - meaning that the lender, the Fed, would take the loss if the collateral wasn’t good. It’s important to highlight the Bear Stearns deal to show how Mr. Paulson could benefit Goldman Sachs while brokering the deal between Bear Stearns and JP Morgan. While the deal certainly benefitted JP Morgan in the ‘deal’ terms agreed to by the Fed and Stearns assets, it also benefitted Goldman Sachs by eliminating a competitor. (5)(Source: The Wall Street Journal, March 17, 2008 “J.P. Morgan Buys Bear in Fire Sale, As Fed Widens Credit to Avert Crisis”)

The Bear Stearns deal was only the start of what has proven itself to be phenomenal positioning by JP Morgan to rid itself of bad debt/collateral with (once competitive) banks while, in turn, gaining their assets, the next to fall to JPM was Lehman Brothers. True, JPM did not buy Lehman’s but they did freeze 17 Billion of funds, on account at JPMorgan Chase, belonging to Lehman Brothers which hastened it’s failure.

Simply put, the Lehman Brothers deal with Barclays was the deal of the century for JP Morgan. The events that lead up to the deal are astounding when one considers the other institutions that were in trouble (orchestrated rescue of AIG for example) and how they were being handled by Mr. Paulson and Mr. Bernanke. Why was Lehman Brothers treated differently? Could be and it’s true that JP Morgan was Lehman's bank. For the benefit of JPM, Lehman’s could not be saved by TARP nor could it be allowed to go into traditional bankruptcy as any of these options exposed JP Morgan to a possible loss of $69 Billion. TARP or a liquidated bankruptcy would place JP Morgan as a creditor along with everyone else - there are 69 billion reasons why this could not happen. (6)(Source: Esquire, September 11, 2008 “The Deal of the Century”)

The only option that would benefit JP Morgan was to somehow package up the bad collateral that existed between Lehman’s Financial Services division and JP Morgan and pass it onto a buyer. While it’s true the Lehman’s did file for Bankruptcy, it was only for one day, and then sold to Barclays in a deal that closed five days later. What many in the public don’t know is that along with the deal being brokered at the Fed, JP Morgan was allowed to package bad collateral in the deal. In fact the deal almost didn’t go through because JP Morgan felt slighted in that it wasn’t allowed to package even more bad collateral.

Between March and September of 2008, JP Morgan accomplished the impossible - benefitting repeatedly and handsomely from the financial crisis. Three major financial institutions failed, two of which should have had a ripple effect to the very core of JP Morgan – yet JPM came out smelling like a rose, packaging and removing billions in bad debt/collateral and gaining nearly $550 billion in assets -prompting record percentage gains for the second and third quarter of 09 and with the purchase of WaMu, JPM gained a solid footprint into the West Coast banking system.

For instance, it was recently revealed that former Treasury Secretary Hank Paulson admitted to New York Attorney General Andrew Cuomo that he coerced CEO Ken Lewis by threat of ouster if Bank of America invoked a Material Adverse Change (MAC) clause to block the acquisition of troubled Merrill Lynch. Paulson also added, however, that he made this threat at the request of Fed Chairman Ben Bernanke. In addition, it is suggested that such action by the Fed and Treasury amount to coercing CEO Ken Lewis to withhold disclosure of materially significant information from shareholders regarding the deal. (7)(Source: Wall Street Journal, April, 23, 2009 “Lewis Testifies U.S. Urged Silence on Deal”)

As a further example, documents recently released as part of a Judicial Watch Freedom of Information Act request details further coercion by the government regarding TARP funds distribution. "If a capital infusion is not appealing, you should be aware that your regulator will require it in any circumstance," Paulson's one-page list of talking points for a meeting with nine U.S. banks' chief executives said. "We don’t believe it is tenable to opt out because doing so would leave you vulnerable and exposed." Accompanying Paulson were Federal Reserve Chairman Ben Bernanke, Federal Deposit Insurance Corporation Chairman Sheila Bair and New York Federal Reserve Bank President Timothy Geithner (now current Treasury Secretary). Three and a half hours after the meeting was scheduled to begin, Paulson had obtained the bankers’ signatures on half-page forms along with the handwritten amount of the federal government’s investment, according to the documents. (8)(Source: Bloomberg, May 14, 2009 “Paulson Memo Warned Banks to Take Aid or Be ‘Exposed’ (Update1)”)

When WaMu CEO Kerry Killinger asked Treasury Secretary Henry Paulson to use his influence to put WaMu on a list of protected stocks in July, Paulson told him, "You should have sold to JPMorgan Chase in the spring, and you should do so now. Things could get a lot more difficult for you," according to one of several current and former high-ranking WaMu executives who confirmed details of the call. (9)(Source: Seattle Times, November 23, 2008 “WaMu conspiracy theories about, but there’s no smoking gun”)

In July of 2008, two months before the seizure Washington Mutual, Inc. was denied protection from illegal short-selling by the SECs naked short-sale ban that protected 19 financial institutions (eight of which were at Paulson's TARP meeting). Data through June 2008 shows that at one point that month "failures to deliver" (an indicator of illegal or naked short-selling) of Washington Mutual’s stock reached 9 million shares. From June 5 to June 19 there were, on any given day, at least 1 million WaMu shares that had "failed to deliver."

According to the OTS fact sheet released after the seizure, Washington Mutual was considered to meet OTS capitalization requirements and was in fact a solvent bank. In forward looking third quarter forecasts to the media, CEO Alan Fishman related that Washington Mutual, Inc. had access to over $50 billion in capital and enough liquidity to meet fixed obligations through 2010. According to some reports, the OTS seized Washington Mutual at the behest of the FDIC. The subsequent sale to JP Morgan Chase & Co. was conducted hastily on a Thursday evening, in a highly irregular auction that typically is designed to take place 180 to 360 days after seizure. The price paid was $1.88 Billion for a company with over $300 Billion in assets, over $20 Billion in book value, and over 2200 branches. It’s been recently published that the deal, by government estimates, gave Washington Mutual Bank and Washington Mutual Bank fsb assets to JP Morgan Chase for 1.5 cents on the dollar. (10)(Source: OTS Fact Sheet, September 25, 2008, “OTS Fact Sheet on Washington Mutual Bank”)

While these revelations suggest that Washington Mutual, Inc. was not a failed institution, this notion is further supported by Kirsten Grind in her investigative article “Why Did They Close WaMu: Why did regulators abruptly close Washington Mutual when it had the cash to operate?”. Kirsten Grind indicates that she has internal documents showing that Washington Mutual had 29 billion dollars of net liquidity, was well above the OTS standards, and a source, an official who states, regulators “pulled the trigger too soon.” In addition, it’s been reported that John Reich, then head of the OTS, informed WaMu executives that JP Morgan Chase was in Washington lobbying regulators for the Washington Mutual purchase – since when is it acceptable for one private institution to lobby the Fed for the demise and purchase of another private institution? The ability to even attempt to lobby shows the improper connections that are in place between our regulators and “New York” banks.

All of this, and other articles that are beginning to surface support speculation that Washington Mutual was improperly seized, recent court filings in Federal District Court in Texas and U.S. Bankruptcy Court in Delaware suggest something more sinister.
For example, the filing in U.S. Bankruptcy Court in Delaware, referring to a Texas State Court action - it is alleged that wrongful conduct of JP Morgan Chase & Co. includes:

(i) entering into false negotiations with the Washington Mutual, Inc. under the guise of a good-faith bidder during the summer of 2008;

(ii) gaining access to Washington Mutual's confidential and proprietary information through a variety of deceptive practices; and

(iii) disclosing Washington Mutual's confidential information as well as false information to the media and investors in an effort to drive down WMI's credit rating and stock price, cause depositors to withdraw deposits as a result of fear, and hamper efforts of Washington Mutual, Inc. to find a purchaser for itself.

The filing suggests that additional claims that could arise in the bankruptcy proceeding might include, without limitation, unfair competition, tortious interference, interference with prospective economic advantage, breach of contract, misappropriation of confidential information and trade secrets, and conversion. The filing further suggests that by way of these claims, JPMC may be held responsible for the destruction of Washington Mutual, Inc. and the total losses suffered by its creditors and shareholders. It’s been reported that on October 16, 2008, the JPMorgan team in a meeting with Washington Mutual counterparts in a private room at Purple, a swanky downtown Seattle wine bar sympathized, then made a jarring remark: “We were watching money “fly out of the bank,” from a “war room” at JPMorgan’s New York headquarters”, said one JPMorgan executive. Our question of course is - How is it possible for JP Morgan Chase to know the day-to-day financial operations of another private entity?

In addition, the underlying Texas action alleges that JP Morgan Chase & Co. used plants or moles (e.g., the Rotella allegations) inside of Washington Mutual, Inc. for the purposes of gaining insider information and exploiting that information for economic gain. Recent news reports have stated that in 2005, a small group of senior risk managers drew up a plan to limit risky lending practices, but a new executive team at the bank nixed the plan. Thus, it is conceivable that if the allegations of insider plants are true, these same plants could have knowingly undertaken or encouraged risky or fraudulent lending practices in an effort to destroy Washington Mutual's reputation and shareholder value.

Under Federal Rule of Civil Procedure 11(b), the above-identified filings are subject to the requirement of certification "that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances . . . ." Thus, whereas previous revelations in the news or government papers regarding Washington Mutual's situation might command a relatively lower level of trust, the allegations in the above-identified filings demand the additional respect that the Federal Rules of Civil Procedure are designed to command.

WMI nor WaMu never received a letter from the OTS to raise additional capital, in fact the OTS, even when placing WaMu into the hands of the FDIC, even stated that WaMu was well capitalized but stated that WaMu was “systemically risky” and that’s why it was placed into receivership. Also, there was a Memorandum of Understanding (MOU) active and in-place between WMI and the OTS.

Worth pointing out again - the OTS said WaMu was "systemically risky" while Mr. Paulson did not add WaMu to the "Do Not Short List" which included 19 institutions Mr. Paulson considered "systemically important" - Which was it? Was WaMu systemically important or not? Within the tiniest of timeframes - the Office of Thrift Supervision, named the FDIC as receiver for the 100 year old institution, and then sold assets of $307 billion and total deposits of $188 billion to JPM within hours for 1.888 Billion. It’s absolutely amazing the timing behind the receivership and it’s even more amazing the ability of JPM to be right there, ready with slides and research - ready to make an offer that conformed to the FDIC’s requirements, ready to provide a winning bid with no negotiations. It’s been further revealed that while the FDIC claims there were multiple bids and JP Morgan had the only conforming bid – James Dimon, JPM CEO, stated in during a Seattle speech that “The dirty little secret was, JPM was only the bidder and could have got the whole company for $1". Again, an example of the inconsistencies in comments about the deals details between the FDIC and JP Morgan Chase. (11)(Source: Seattle Times, July 15, 2009 “Chase CEO Dimon: No more cuts in Seattle operations”)

Even more amazing than the receivership's timing was JPM's incredible fortune-to be at the ready with bid in hand. JPM managed to navigate the moral hazard involved in participation in a limited auction and low-ball bid for a coveted rival with nary a whisper of populist rage is either a testament to the chaos of the period or the desensitized nature of the common citizen and all of this was done within hours...

What is a bank run?

There has yet to be a clear definition of “bank run”. While many in media (notably CNBC) damaged WaMu with reports of a 16 Billion dollar bank run, no one seems to put that statement or those numbers into context – 16 Billion of the 300 Billion deposit base is equivalent to 5%. Is 5% a bank run? Or is the term ‘bank run’ just an ill- coined and oft misused term in the media to incite fear and make stories news worthy. In addition, CNBC mistakenly reported a bank run/closure at WaMu branches that became a self-fulfilling prophecy. CNBC's mistaken reporting may have actually started the 'bank run'. At any rate, 5% or 16 Billion is small when compared to the entire removal of private and corporate deposits during the summer of 08 – by most accounts, some $550 Billion moved in the market during that time frame. Finally, while the media favored the term ‘bank run’, the regulatory organizations “FDIC/OTS” downplayed that phrase and used variations of “systemic risk” instead.

Questions we would like asked and answered:

1) Did Goldman Sachs, in any way, benefit from deals fostered by the federal regulators with respect to Barclays, Bear Stearns, Lehman Brothers or JP Morgan Chase? The backdrop to this question is: Was GS allowed to control or influence deals between other institutions that benefitted GS as to the removal/weakening of a competitor or that allowed GS to move/repackage toxic loans/collateral.

2) Did JP Morgan Chase, in any way, benefit from deals fostered by the federal regulators with respect to Barclays, Lehman Brothers or Washington Mutual? The backdrop to this question is: Was JPM allowed to control or influence deals between other institutions that benefitted JPM as a removal/weakening of a competitor or that allowed JPM to move toxic loans/collateral.

3) Did JP Morgan Chase contact any federal regulator in any way that is now looked on as suspicious or calculated with respect to the Barclays, Lehman or Washington Mutual deal?

4) How did JP Morgan Chase create a “War Room” that monitored the day-to-day cash flow of Washington Mutual – when, where and who was providing the daily (hour or minute) financial data?

5) Did Moodys, as a credit rating agency, ever take information or entertain presentations by JP Morgan Chase with respect to Washington Mutual? If so, did Moody’s use the information/data provided by JP Morgan Chase to downgrade Washington Mutual’s status in any way?

6) With respect the FDIC and OTS, which agency is granted the authority to close banks? Follow up: What procedures are in place when the FDIC and OTS do not agree (internal discourse) on the status of a bank? Is it appropriate for the FDIC to pressure the OTS to seize the bank? To what lengths can the FDIC go to to cover its operation or force the OTS to place a bank into receivership? Is it appropriate for the FDIC to continually hound the OTS, when the OTS has publically and privately stated the institution in question if adequately funded?

7) Why was the FDIC in contact with the OTS and JPM with respect to the possible closure of Washington Mutual when the OTS and all documents collected to date showed (shows) that Washington Mutual was well capitalized?

8) Why has the FDIC and OTS refused to approve Freedom of Information Act (FOIA) requests from Kirsten Grind or Al Scott with the Puget Sound Business Journal?

9) Why has the FDIC provided completely blacked out (100% redacted) emails between the FDIC and OTS with respect to Washington Mutual? These were requested and delivered to Kirsten Grind and Al Scott on previous FOIA requests.

10) Why has the FDIC, time and time again, not followed their play-book with respect to Washington Mutual’s sale and assumption, specifically the FDIC’s ability to adjust the purchase and assumption agreement? Background: In its role as "receiver", the U.S. Congress has entrusted the FDIC with virtually complete responsibility for resolving failed federally insured depository institutions. In exercising this significant authority, governing policies and regulations require the FDIC "by statute to maximize the return on the assets of the failed bank or thrift and to minimize any loss to the insurance funds." Further guidelines direct "adjustments to the closing books may be made between the date of the closing (25 Sept 08) of the institution and the "settlement date." The settlement date may be from 180 days to 360 days after the bank or thrift closing, depending on the failed institution's size. Adjustments reflect (1) the exercise of options by the acquirer, (2) either any repurchase of assets by the receiver or any "put back" of assets to the receiver by the assuming institution, and (3) the valuation of assets sold to the acquirer at market prices." (Source: FDIC Resolution Handbook). The FDIC let this date slip without any such adjustment even when JPM’s public and SEC filings shows that it has negative goodwill due to the purchase of WaMu. In fact, the FDIC has sided with JP Morgan Chase in every respect in the court system even when the court system has labeled JP Morgan’s motions as “…frivolous”.

11) What is the generally accepted ‘financial’ definition of a bank run? Is 5% of a banks deposit base a bank run? Follow up: Does the FDIC, SEC or Fed have any responsibility to ensure that media representations are accurate – meaning should the FDIC, SEC or FED had stepped in and backed Washington Mutual on its claim that it was well capitalized? The FDIC’s mission is to insure bank deposits and prevent melt downs – wouldn’t it have been appropriate for the FDIC to publically state “Depositors of Washington Mutual – WaMu is well capitalized, there is no need to withdraw your funds and you are protected up to 100K…”

12) What communication was taking place between the SEC and the FED to prevent naked short sells (NSS) of “bank” shares?

13) Why does the SEC list on its website known NSS shares but doesn’t do anything to resolve it?

14) How is it possible for a bank to be denied listing on a protection (no nss) list reserved for Systemically important institutions – then – be labeled systemically important when considering its financial connections to the market if it failed? Specifically, when all that was needed to be added to the list, to be given protection, was approval of Mr. Paulson?

Noted Links:

(1) Case No. 08-12229 (MFW), U. S. Bankruptcy Court for the State of Delaware http://www.kccllc.net/wamu

(2) USA Today, Dec. 11, 2009 “Goldman execs to forgo cash bonuses for '09, will get stock” http://www.usatoday.com/money/industries/banking/2009-12-10-goldman-execs_N.htm

(3) Esquire, September 11, 2009 “Deal of the Century” www.esquire.com/features/barclays-deal-o...

(4) The Puget Sound Business Journal, December 28, 2009 “What a Deal” and “Why did regulators close WaMu?” www.portfolio.com/industry-news/banking-.../

(5) The Wall Street Journal, March 17, 2008 “J.P. Morgan Buys Bear in Fire Sale, As Fed Widens Credit to Avert Crisis” online.wsj.com/article/SB120569598608739...

(6)Esquire, September 11, 2008 “The Deal of the Century” www.esquire.com/features/barclays-deal-o...

(7)Wall Street Journal, April, 23, 2009 “Lewis Testifies U.S. Urged Silence on Deal” online.wsj.com/article/SB124045610029046...

(8) Bloomberg, May 14, 2009 “Paulson Memo Warned Banks to Take Aid or Be ‘Exposed’ (Update1)” www.bloomberg.com/apps/news?sid=auLCYdFy...

(9) Seattle Times, November 23, 2008 “WaMu conspiracy theories about, but there’s no smoking gun” seattletimes.nwsource.com/html/businesst...

(10)OTS Fact Sheet, September 25, 2008, “OTS Fact Sheet on Washington Mutual Bank” http://files.ots.treas.gov/730021.pdf

(11)Seattle Times, July 15, 2009 “Chase CEO Dimon: No more cuts in Seattle operations” seattletimes.nwsource.com/html/businesst...