Bear, Deloitte & Touche Sued Over Mortgage Funds’ Collapse
mtippett | April 8, 2008 at 12:08 pmby
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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.
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