A gang made up of some of Wall Street’s biggest names is set to realize a big score from the sale of OneWest Bank to CIT Group for $3.4 billion.
George Soros was part of the group that together with buyout baron Christopher Flowers and billionaire Michael Dell bought the assets in 2009 of the former IndyMac, one of the nation’s largest bank failures ever, from the Federal Deposit Insurance Corporation, which had seized its assets. The group paid $1.55 billion for the bank in the teeth of the financial crisis. The deal to sell the bank to CIT Group was announced Tuesday.
The deal is truly a legacy of the financial crisis. IndyMac was the second-biggest bank failure of the financial crisis and the FDIC agreed to share losses on a portfolio of loans. Mnuchin’s group was the only bidder for IndyMac’s assets and the FDIC was desperately trying to recapitalize the crumbling banking sector. Paulson had made his name betting against mortgage securities in the months leading up to the financial crisis. And John Thain, the CEO of CIT Group, was the last CEO of Merrill Lynch, a controversial run that ended with the sale of Merrill Lynch to Bank of America. As the bank recovered, some of OneWest’s foreclosure practices came under criticism, but the bank has long said those criticisms were unfounded.
