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

JOBS Act Propels Real-Estate Crowdfunding Platform

Oct 21 2014 | 2:57am ET

If D.J. Paul were a real estate development, he would be described as “multi-use...

Lifestyle

Strippers Accused Of Robbing Hedge-Fund Manager Face Jail

Oct 20 2014 | 9:20am ET

A group of alleged stripper-thieves—whose victims include a hedge-fund manager...

Guest Contributor

PAAMCO: European Equity Exposure - Challenging Year, But All is Not Lost

Oct 16 2014 | 4:12am ET

European equity hedge fund managers have had a tough time so far this year. The...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

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.