A massive shareholder lawsuit lodged against Washington Mutual’s former leadership team will be allowed to move forward, a federal judge in Seattle ruled Tuesday evening.
U.S. District Judge Marsha Pechman denied WaMu executives’ efforts to throw out the nearly 300-page lawsuit, in a ruling that she foreshadowed in an hours-long hearing held earlier this month.
Executives, including former chief executive Kerry Killinger, are alleged to have made false and misleading statements in the months before WaMu’s September 2008 collapse, including statements about the bank’s risk management, its underwriting standards on home loans and its appraisal process, according to the ruling filed by Pechman in U.S. District Court in Western Washington.
A call to Killinger’s Seattle attorney, Barry Kaplan, was not immediately returned.
Pechman, who earlier this year forced the shareholders’ legal team to revise its massive lawsuit, said in her current ruling that “plaintiffs have largely succeeded in remedying the deficiencies of their initial complaint.”
The ruling pushes the suit further toward trial, with Pechman instructing the attorneys involved in the case — more than a dozen and many of them from Seattle-area firms — to submit time schedules within the next two weeks with a proposed trial date in mind.
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