Former Washington Mutual Inc executives agreed to settle a lawsuit for less than 10 percent of the $900 million originally sought by the FDIC for their role in the biggest bank failure in U.S. history, the Wall Street Journal said, citing people familiar with the situation.
A large portion of the payout, which is expected to total less than $75 million, would come from insurers and the bank's estate, and not from the former executives, the Journal said.
The Federal Deposit Insurance Corp (FDIC) had accused former Washington Mutual Chief Executive Kerry Killinger, Chief Operating Officer Stephen Rotella and former home lending chief David Schneider of gross negligence and reckless disregard for the long-term safety of the bank.
The defendants denied wrongdoing.
An attorney for Rotella and Schneider told the Journal that a settlement had been reached, but declined to comment on the dollar amount. The settlement also would end litigation against their wives, the paper said.
The defendants did not admit or deny any wrongdoing in settling the case, the paper said.
A lawyer for Killinger declined to comment to the Journal, as did the FDIC.
Lawyers for Killinger, Rotella and Schneider as well as FDIC could not immediately be reached for comment by Reuters outside regular U.S. business hours.
(Reporting by Sakthi Prasad in Bangalore; Editing by Roshni Menon)