Bear, Auditor Sued Over Mortgage Funds’ Collapse

Apr 8 2008 | 11:23am ET

The court-appointed liquidators of two collapsed Bear Stearns hedge funds have sued the firm and its auditor for violation of fiduciary and professional duties.

The suit seeks the recovery of $1 billion in losses, as well as punitive damages, from Bear and auditor Deloitte & Touche. The Cayman Islands-appointed liquidators, Geoffrey Varga and William Cleghorn, accuse Bear of promising investors that the funds were relatively safe and conservative, when in fact they could not survive even a “slight downtick” in the mortgage market.

Bear Stearns “conceived, marketed and managed hedge funds that they knew would be viable so long as—but only so long as—the U.S. housing market continued to rise,” the suit, filed in Manhattan federal court yesterday, alleges.

For its part, Deloitte was “at a minimum negligent” in auditing the funds.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.