–
Talk about making lemonades from your old lemons.
–
This is one of those rich get really, really richer stories. Some of Wall Street’s biggest names, organized by former Goldman Sachs partner Steve Mnuchin, are about to score big time from the sale of OneWest Bank to CIT Group for $3.4 billion, Forbes reports.
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at [email protected].
Thank you.
Hedge fund billionaires John Paulson and George Soros were part of the group that, in 2009, bought the assets of IndyMac, the second biggest bank failures in US history. The Federal Deposit Insurance Corporation had seized those assets.
The deal was described by Forbes as a legacy of the financial crisis. Paulson and Soros, together with Christopher Flowers and billionaire Michael Dell, paid $1.55 billion for the bank while financial ruin was raging everywhere.
Talk about making lemonades from your old lemons.
The announcement of the deal to sell the bank to CIT Group was made on Tuesday.
Paulson’s Recovery Fund holds hiss stake in the bank, which has already paid its big-name backers $500 million in dividends.
Back in 2009, the FDIC agreed to share losses on a portfolio of IndyMac loans. Mnuchin’s group was the only bidder for those assets, and the FDIC was desperate. The sky was falling, as you may recall, and the banking industry was about to shut down as people were planning to move to bartering sheep once again.
Paulson made his reputation betting against mortgage securities in the months just before the crisis. John Thain, CEO of the CIT Group, was the last CEO of Merrill Lynch, before the sale of Merrill Lynch to Bank of America.
Some of OneWest’s foreclosure practices came under serious criticism, Forbes reported, but no one ended behind bars, and that’s what counts.
Today OneWest’s assets are at $23 billion, and it operates 73 bank branches in southern California.
