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) -- The

Securities and Exchange Commission

announced Friday that it charged three former executives of failed

IndyMac Bank

with securities fraud.

The SEC charged former CEO Michael Perry and former CFOs A. Scott Keys and S. Blair Abernathy with participating in "filing of false and misleading disclosures about the financial stability of IndyMac and its main subsidiary, IndyMac Bank F.S.B."

The SEC said that the former executives had "received internal reports about IndyMac's deteriorating capital and liquidity positions in 2007 and 2008," but failed to disclose the information to investors as the holding company "sold millions of dollars in new stock."

Lorin Reisner, the deputy director of the SEC's Division of Enforcement said the executives "made false and misleading disclosures about IndyMac at a time when the company's financial condition was rapidly deteriorating," adding that "the federal securities laws do not become optional when the news is negative."

The SEC alleged that Perry failed to disclose in May 2008 that "that IndyMac would not have been 'well-capitalized' at the end of its first quarter without departing from its traditional method for risk-weighting subprime assets and backdating an $18 million capital contribution."

Abernathy agreed to settle the SEC's charges for a $100,000 penalty, $25,000 in disgorgement, and prejudgment interest of $1,592.26 -- without admitting or denying guilt -- according to an SEC statement. Abernathy also agreed to be suspended from "from appearing or practicing before the SEC as an accountant."

IndyMac failed in July 2008, and was the second-largest bank or thrift failure during the current wave of closures that began that year. The largest failure was Washington Mutual Bank, which was purchased from the

Federal Deposit Insurance Corp.


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, with no losses to the deposit insurance fund.

IndyMac's remaining assets were eventually sold to IMB HoldCo., an investor group led by Steven Mnuchin, that included J.C. Flowers, Paulson & Co., Stone Point Capital and other investors. The surviving thrift is OneWest Bank.

While a revised figure for the end of 2010 isn't yet available, the FDIC estimated that as of December 31, 2009, the failure of IndyMac had cost the deposit insurance fund $12.75 billion.


Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.