
Bear faces billion-dollar lawsuit from Kinetic
LOSSES & LAWSUITS
NEW YORK - Struggling investment bank Bear Stearns is facing a lawsuit for $1 billion over the collapse of two of its hedge funds last July, from the funds' liquidators, Kinetic Partners. Bear Stearns is accused of marketing the funds as viable when they were highly vulnerable to a housing market downturn, which led to billion-dollar losses on the funds.
The troubled US bank was bought at a bargain price last month by rival JP Morgan in a Fed-brokered deal to stave off bankruptcy. Kinetic has filed the suit to recoup losses against both Bear Stearns and the funds' auditor, Deloitte & Touche. The funds were invested in asset-backed securities dependent on subprime mortgages, and were frozen in June. Managers' and financiers' negotiations fell apart the following month. The lawsuit claims Bear Stearns and Deloitte & Touche failed to live up to assurances the funds were safe investments.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
SVB opens floodgates on liquidity buffers debate
European regulator says HQLAs should be booked at fair value, but not everyone agrees
Investing in operational readiness to optimise FRTB capital
A forum of industry experts discusses the implementation of FRTB, the burden of investment into data and infrastructure for FRTB compliance, the considerations for banks in using the standardised approach (SA) and the internal model approach (IMA)
SEC cyber rules risk creating web of confusion and costs
Proposals would require breach notifications, public disclosures and annual cyber assessments
Indonesia readies close-out netting after passing P2SK Law
Bankruptcy law changes remove close-out netting obstacles
Top 10 operational risks: The umpire strikes back
Tougher regulatory enforcement, new consumer rules and rise of ESG are ringing alarm bells
Behnam comments fan JSCC hopes for US client clearing
Japan clearing exec welcomes CFTC chair’s pledge to keep discussing OTC clearing status for non-US houses
SVB wouldn’t happen in Europe, says Deutsche CIB head
Campelli also thinks Credit Suisse’s bailed-in AT1 bonds acted as originally intended