By Aruna Viswanatha
(Reuters) - A federal judge on Monday dismissed parts of a securities fraud case against two top executives of failed mortgage lender IndyMac Bancorp, according to a lawyer for one of the executives.
U.S. District Judge Manuel Real in Los Angeles dismissed claims based on five of seven securities filings at issue in the case, a lawyer for former IndyMac chief executive Michael Perry said.
The ruling substantially narrows the Securities and Exchange Commission's case against Perry and former finance chief Scott Keys ahead of a scheduled June trial.
"This case should never have been filed," the lawyer, Jean Veta of Covington & Burling, said in a statement. "Mr. Perry was completely open and transparent in his efforts to guide IndyMac through the worst financial crisis since the Great Depression."
Donald Searles, a senior trial attorney in the Los Angeles regional office of the SEC who is litigating the case, said the agency's claims remain intact even if the evidence was narrowed. "...we look forward to presenting the case that we do have," said Searles.
A lawyer for Keys did not immediately respond to requests for comment, but the judge's order could effectively end the case against him, because he was on a leave of absence from the company during the time period of the filings still at issue.
The SEC in February 2011 accused Perry and Keys of fraud for concealing the bank's financial condition.
California-based IndyMac, which specialized in a type of mortgage that often required minimal documentation from borrowers, was seized by banking regulators in July of 2008 as the financial crisis gathered steam.
Its failure cost the Federal Deposit Insurance Corp, which stands behind bank deposits, about $12.8 billion.
The case is scheduled for trial beginning on June 26.
Another former IndyMac CFO, Blair Abernathy, last year settled with the SEC without admitting or denying the allegations, paying $125,000 plus prejudgment interest.
The case is Securities and Exchange Commission v. Michael W. Perry and A. Scott Keys, U.S. District Court for the Central District of California, case No. 11-cv-01309.
(Reporting By Aruna Viswanatha; Editing by Tim Dobbyn)