The Securities and Exchange Commission (SEC) is vowing to press on with its civil fraud case against IndyMac's former chief executive after a judge upheld his own decision to whittle the government's claims.
U.S. District Judge Manuel Real of California's Central District ruled Monday that IndyMac and ex-CEO Michael Perry did not mislead investors when the bank omitted from a May 2008 SEC filing a supplemental — less favorable — ratio for weighting subprime assets that it had reported to the Office of Thrift Supervision (OTS).
Perry contended the OTS considered the bank to be well capitalized and had waived any requirement the bank report both benchmarks.
Real reached a similar ruling in July, but revisited the issue after the SEC asked him to reconsider. The SEC filed the suit against Perry in February 2011. It has not specified the amount of damages it seeks to recoup from Perry, but it is asking the court to order him to return any financial gain he received from his alleged unlawful conduct, with interest, and to pay civil penalties.
SEC spokesman John Nester said in a statement Tuesday that Real's latest ruling "merely clarified a decision from earlier this summer." Still, he said, "We continue to look forward to trying our case against the firm's CEO and will continue to consider our options regarding the portion of the case that was dismissed."
Perry, who presided over the $32 billion-asset IndyMac before it was seized by the Federal Deposit Insurance Corp. in 2008, is expected to stand trial on the question of whether the bank failed to disclose details about an $18 million cash infusion from its holding company in the spring of 2008.
The SEC accuses Perry of backdating the capital contribution to make the bank appear to be well capitalized. Perry contends the company's accounting for the money met with the approval of both its auditor and the OTS.
"Mr. Perry looks forward to dispensing with this one remaining issue at trial," Perry's lawyer, D. Jean Veta, said in a press release following Monday's ruling.
In May, the court dismissed a series of the government's claims against Perry and ruled he could not be forced to repay allegedly unlawful gains.
For his part, Perry continues to contest the charges publicly. He wrote recently on a blog he created to defend himself he is "confident and in fact anxious for the truth (that I did not commit securities fraud) to emerge."