IndyMac Bancorp's former chief executive says a federal judge erred when he ruled the failed bank's insurers didn't have to pay for his defense costs in a legal fight with government regulators over allegations of fraud and securities violations, Dow Jones Daily Bankruptcy Review reported today. Lawyers for Michael W. Perry told a federal appellate court in California on Thursday that an interrelated wrongful acts exclusion provision in IndyMac's $80 million directors' and officers' insurance policy shouldn't let insurers off the hook for his defense costs in his legal fight with the Securities and Exchange Commission. The SEC sued Perry along with IndyMac's former finance chief, alleging that the failed thrift didn't properly disclose the risks of its subprime-mortgage holdings to investors.
