Calif. won't probe NY Sen. Schumer over IndyMac

August 23, 2008 6:03:31 PM PDT
New York Sen. Charles Schumer won't face a California investigation into whether he helped fuel IndyMac Bancorp Inc.'s collapse by expressing concerns about the mortgage lender's soundness.

The California Attorney General's office said in a letter Thursday that there was "insufficient evidence" to investigate Schumer. A Schumer spokesman declined to comment Saturday.

Some former IndyMac employees say Schumer's remarks in June 26 letters to regulators spurred a run on the bank that led to a government takeover. They want the senator to be prosecuted under a California law against making false statements about a bank's solvency.

Assistant Attorney General Thomas Greene said Schumer's statements were true and drawn from public information.