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Lead Plaintiff’sAmended Consolidated Securities Complaint No. 2:08-MD-1919 MJPBernstein Litowitz Berger & Grossmann LLP1285 Avenue of the Americas New York, NY 10019(212) 554-1400
12345678910111213141516171819202122232425262728UNITED STATES DISTRICT COURTWESTERN DISTRICT OF WASHINGTONAT SEATTLEIN RE WASHINGTON MUTUAL, INC.SECURITIES LITIGATIONThis Document Relates to: ALL ACTIONS No. 2:08-md-1919 MJPLead Case No. C08-387 MJPCLASS ACTION COMPLAINTJURY DEMANDAMENDED CONSOLIDATED CLASS ACTION COMPLAINT
Case 2:08-md-01919-MJP Document 293 Filed 06/15/2009 Page 1 of 288
Lead Plaintiff’sAmended Consolidated Securities Complaint No. 2:08-MD-1919 MJPPage iBernstein Litowitz Berger & Grossmann LLP1285 Avenue of the Americas New York, NY 10019(212) 554-1400
12345678910111213141516171819202122232425262728TABLE OF CONTENTSI.
OVERVIEW OF THE ACTION .........................................................................................2
II.
THE PARTIES.....................................................................................................................5
1.
Plaintiffs .......................................................................................................5
Lead Plaintiff ...............................................................................................5
Additional Named Plaintiffs ........................................................................6
2.
The Exchange Act Defendants.....................................................................7
Washington Mutual ......................................................................................7
The Officer Defendants ................................................................................8
The Controller Defendants .........................................................................10
The Audit Committee and Finance Committee Defendants ......................10
3.
Relevant Non-Parties .................................................................................12
First American Corporation .......................................................................12
Lenders Services Inc. .................................................................................12
III.
CLAIMS BROUGHT PURSUANT TO THE EXCHANGE ACT ...................................13
FIRST CLAIM FOR RELIEF ...........................................................................................13
A.
Defendant Killinger’s False And Misleading Statements ......................................14
1.
Killinger’s Statements Regarding WaMu’s Risk Management .................14
a.
Killinger’s Statements Regarding WaMu’s Risk Management Were False and Misleading ......................................17
b.
Killinger Acted With Scienter In Making False AndMisleading Statements Regarding WaMu’s Risk Management ...................................................................................22
2.
Killinger’s Statements Regarding The Appraisals For WaMu’sLoans ..........................................................................................................29
a.
Killinger’s Statements Regarding The Appraisals For WaMu’s Loans Were False and Misleading ..................................32
Case 2:08-md-01919-MJP Document 293 Filed 06/15/2009 Page 2 of 288
Lead Plaintiff’sAmended Consolidated Securities Complaint No. 2:08-MD-1919 MJPPage iiBernstein Litowitz Berger & Grossmann LLP1285 Avenue of the Americas New York, NY 10019(212) 554-1400
12345678910111213141516171819202122232425262728 b.
Killinger Acted With Scienter In Making False andMisleading Statements Regarding WaMu’s Appraisals ................51
3.
Killinger’s Statements Regarding The Underwriting Of WaMu’sLoans ..........................................................................................................53
a.
Killinger’s Statements Regarding The Underwriting Of WaMu’s Loans Were False and Misleading ..................................59
b.
Killinger Acted With Scienter In Making False andMisleading Statements Regarding The Underwriting Of WaMu’s Loans ...............................................................................79
4.
Killinger’s Statements Regarding WaMu’s Financial Results AndInternal Controls ........................................................................................87
a.
Killinger’s Statements Regarding WaMu’s FinancialResults And Internal Controls Were False and Misleading ..........95
b.
Killinger Acted With Scienter In Making False andMisleading Statements Regarding WaMu’s FinancialResults And Internal Controls ......................................................115
B.
Defendant Casey’s False And Misleading Statements ........................................121
1.
Casey’s Statements Regarding WaMu’s Risk Management ...................121
a.
Casey’s Statements Regarding WaMu’s Risk ManagementWere False and Misleading ..........................................................123
b.
Casey Acted With Scienter In Making False andMisleading Statements Regarding WaMu’s Risk Management .................................................................................123
2.
Casey’s Statements Regarding WaMu’s Appraisals ................................125
a.
Casey’s Statements Regarding WaMu’s Appraisals WereFalse and Misleading ...................................................................126
b.
Casey Acted With Scienter In Making False andMisleading Statements Regarding WaMu’s Appraisals ..............126
3.
Casey’s Statements Regarding The Underwriting Of WaMu’sLoans ........................................................................................................128
a.
Casey’s Statements Regarding The Underwriting Of WaMu’s Loans Were False and Misleading ................................130
Case 2:08-md-01919-MJP Document 293 Filed 06/15/2009 Page 3 of 288
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