According to a June 6, 2012 stipulation filed by plaintiffs, the parties to the Bear Stearns securities litigation have agreed to settle the matter for $275 million. The settlement remains subject to approval by the U.S. District Court in New York City.
The plaintiffs’ 2008 lawsuit alleged that the defendants made material misrepresentations or omissions with regard to the Bear Stearns’ exposure to subprime mortgages. The defendants’ efforts to dismiss the securities lawsuit was denied in January 2011, but the defendants were able to obtain dismissal of the related shareholders’ derivative and ERISA class actions.
The settlement includes Bear Stearns and seven of its former directors and officers, including its former CEO, Jimmy Cayne. The proposed settlement does not include the company’s outside auditor, Deloitte & Touche LLP. Thus far, the settlement is the largest credit crisis related settlement in 2012. Only a handful of settlements arising out of subprime-related lawsuits have been larger, including the Wachovia Preferred Securities settlement, the Countrywide settlement, the Lehman Brothers Offering Underwriters’ settlement, and the Merrill Lynch Mortgage Backed Securities Settlement. (“Bear Stearns Settles Credit Crisis Securities Suit for $275 Million,” D&O Diary, June 8, 2012).
