Court Gives Final Nod to $7M Settlement Ending ‘Stock-Drop’ Case Against IndyMac

An employer “stock-drop” lawsuit against IndyMac Bank FSB filed in the midst of the subprime mortgage crisis ended in a $7 million settlement approved Jan. 19 by the U.S. District Court for the Central District of California (In re IndyMac ERISA Litig.).

The settlement, after attorneys’ fees are deducted, will be paid to slightly more than 2,800 IndyMac employees who invested their 401(k) plan accounts in IndyMac stock before the company went bust and was closed in July 2008 by the federal Office of Thrift Supervision (131 DLR A-2, 7/9/08). According to settlement papers, 25 percent ...