IndyMac Seized by Regulators (Update)

Updated from July 11.

IndyMac Bancorp (IMB Quote) on late Friday was seized by federal regulators in the second largest bank failure in U.S. history.

The Office for Thrift Supervision, IndyMac's regulator, said IndyMac "is unlikely to be able to meet continued depositors' demands" and thus was "in an unsafe and unsound condition." It turned operation of the bank over to Federal Deposit Insurance Corp.

OTS blamed the failure on a bank run following a June 26 letter to the OTS and FDIC from Sen. Charles Schumer (D., N.Y.) that expressed concerns about IndyMac's viability. Depositors withdrew more than $1.3 billion from the bank over the next 11 days, OTS said. ...