Administration April 3, 2007

Bear Stearns Charged with Market Timing, Late Trading

March 16, 2006 (PLANSPONSOR.com) - Federal and market regulators have hit Bear Stearns with a $250 million penalty for market timing and late trading of mutual funds.
Reported by

According to New York State Exchange’s (NYSE) Regulation, the exchange’s regulatory arm, the company will pay $90 million in fines and relinquish $160 million in profits and interest, the Associated Press reported.

Bear Stearns was accused by the NYSE and by the US Securities and Exchange Commission (SEC) of market timing and late trading fund shares from 1999 through 2003. Bear Stearns settled the case without admitting or denying the charges.

Bear Stearns had no immediate comment on how the market timing settlement would affect its future earnings. NYSE Regulation spokesman Scott Peterson told reports that the Bear Stearns settlement was the largest action ever taken by the exchange’s regulatory arm.

As part of its deal with regulators, Bear Stearns must hire a consultant to review compliance procedures and another to administer the fine and give back the relinquished profits to mutual fund investors. The company must also improve its internal compliance efforts.

«