Flagstar Execs Hit With Investor Suit Over $133M FCA Deal

Law360, Los Angeles (January 24, 2014, 8:15 PM EST) -- Flagstar Bancorp Inc.'s top executives were hit with a shareholder derivative suit in Michigan federal court Friday alleging breaches of fiduciary duties and unjust enrichment in the wake of a $133 million False Claims Act settlement with the U.S. Department of Justice.

The suit comes after Flagstar agreed in February 2012 to pay up to $133 million to settle FCA allegations that the bank improperly endorsed federally-insured mortgage loans that eventually defaulted and falsely certified its loan underwriting practices to federal housing authorities. After the settlement,...
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