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Hagens Berman files lawsuit against Washington Mutual

Law firm Hagens Berman Sobol Shapiro has filed a proposed class-action lawsuit against Washington Mutual, a consumer and small business banking company, claiming the company violated the Securities Exchange Act of 1934 and committed securities fraud by artificially inflating the company's financial results through inflation of property appraisals to support risky loans.

Reed Kathrein, lead attorney and HBSS partner at Hagens Berman Sobol Shapiro, said: With the mortgage industry having made so much money in recent years, it is disappointing to hear that these profits were made by inflating loan appraisals that put both the shareholders of Washington Mutual and homeowners across the nation at risk of defaults and foreclosures, while the executives took home handsome paychecks for what was believed to be a real and legitimate performance. We intend to pursue aggressive legal action to protect the rights of investors.

The lawsuit filed in US District Court in Seattle claims Washington Mutual, in cooperation with its appraisal firm, violated the Securities Exchange Act of 1934 and as a result has damaged stock holders and company investors.