Another big bank is paying out large sums to settle a case stemming from the financial meltdown.
Washington Mutual and other defendants have agreed to a $208.5 million settlement to end class action securities fraud lawsuits, according to court documents.
The settlement is among the largest stemming from the financial crisis, trailing a $624 million settlement by Countrywide Financial and $475 million by Merrill Lynch.
The lawsuits accused the defendants of concealing from investors poor loan underwriting and inflated appraisals that juiced earnings and inflated the company's stock price.
As the U.S. housing market began to crash, Washington Mutual's loans soured at an alarming rate.
In September 2008, regulators seized the company's savings and loan business in the largest bank failure in U.S. history.
The day after the seizure, the bank holding company, Washington Mutual Inc., filed for bankruptcy.
Under the terms of the class action settlement, claims against the directors and officers will be settled for around $105 million.
About a dozen underwriters of the company's securities contributed $85 million to the settlement. The company's auditor, Deloitte & Touche, contributed $18.5 million.
The settlement is subject to court approval.
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