FDIC bidding process “less than optimal” Though Hochberg ultimately concludes that the sale was fair, he came down hard on the FDIC for failing to adequately cooperate with his investigation, and questions some of the agency’s actions along the way.
The FDIC’s bidding process, he said, was “less than optimal” and “could have been better.” He notes that the Sept. 16 call from FDIC’s Bair to JPMorgan’s Dimon came “before any formal opening of the bidding process.”
Hochberg also says that “some of the FDIC's actions lack transparency.” As a result, he was “unable to determine whether the FDIC fully understood the value of the assets it seized and sold.”
In general, Hochberg was frustrated with the agency’s balking.
“The FDIC made clear that attempts to compel discovery could be met with certain obstacles . . . which could effectively delay and discovery beyond the tine limits of the examination,” Hochberg wrote. The FDIC had said it would litigate to keep internal deliberations secret, he said.
The agency also responded selectively to document requests, and refused to make Bair and two other senior officials available for interviews. The FDIC’s lack of cooperation was especially egregious compared with other players in the WaMu sale, he said. The OTS, for example, “was helpful and cooperative,” he wrote. (Hochberg didn’t return a call left on Tuesday).
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