FORMER Bear Stearns shareholders who claimed they were misled about the investment bank’s deteriorating health yesterday agreed to settle their lawsuit for $275m (£176m), four years after the company was bought by JP Morgan Chase.
The all-cash settlement resolves claims against Bear and several former executives including long-time chief executive James Cayne, his successor, Alan Schwartz, and former chairman Alan Greenberg.
Investors led by the State of Michigan Retirement Systems asked US District Judge Robert Sweet in Manhattan to grant preliminary approval of the settlement. The defendants denied wrongdoing in agreeing to settle.
JP Morgan agreed to purchase Bear on 16 March 2008, in an emergency buyout brokered by the US Federal Reserve, as fleeing clients were causing a liquidity crunch that drove Bear to the brink of collapse.
After initially agreeing to pay just $2 per share for Bear, JP Morgan later consented to pay $10 per share.
That was far below the $170 that Bear shares once commanded.
City A.M. Reporter