Wolf Popper LLP Files ERISA Class Action Against the Bear Stearns Companies, Inc.
Wolf Popper LLP has filed a lawsuit in the U.S. District Court for the Southern District of New York on behalf of participants and beneficiaries of the Bear Stearns Companies Inc. Employee Stock Ownership Plan (the “Plan”), for violations of the federal pension law (ERISA) in connection with the loss in value of The Bear Stearns Companies, Inc. common stock [NYSE: BSC] acquired and held by present and former employees of Bear Stearns through the Plan. The goal of this litigation is to recover damages sustained by the participants and beneficiaries of the Plan.
The complaint alleges, among other things, that Bear Stearns, and certain of its officers and directors, allowed the imprudent investment of the Plan’s assets in Bear Stearns common stock despite the fact that they knew or should have known that such investment was unduly risky and imprudent due to the Company’s serious mismanagement and improper business practices including, among other practices: (a) causing Bear Stearns to spend billions of dollars purchasing subprime loans despite increasing delinquency rates among subprime borrowers; (b) failing to adequately disclose Bear Stearns’s subprime loan loss exposure to investors, including the Plan’s participants; (c) operating without the requisite internal controls to determine appropriate loan loss provisions; (d) understating loan loss provisions that did not properly reflect the risk facing Bear Stearns; and (e) subjecting the company to billions of dollars in liabilities from civil and criminal lawsuits, all of which caused Bear Stearns’s financial statements to be misleading and which artificially inflated the value of shares of Bear Stearns stock. In short, the company was seriously mismanaged and faced dire financial crisis due to such mismanagement, which rendered Bear Stearns stock an imprudent investment. Bear Stearn’s actions have caused the Plan to suffer hundreds of millions of dollars.
Related Practice Area...
