SEATTLE, March 24 /PRNewswire/ -- Hagens Berman Sobol Shapiro LLP ("Hagens Berman") (http://www.hbsslaw.com/bsc) today announced it filed a proposed class-action lawsuit in the United States District Court for the Southern District of New York on behalf of The Bear Stearns Companies ("Bear Stearns" or the "Company") current and former employees, claiming the company violated ERISA laws concerning the management of the Employee Stock Ownership Plan ("the ESOP" or "the Plan") from December 14, 2006 through the present (the "Class Period").
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The complaint claims Bear Stearns, headquartered in New York, failed to provide due diligence in the management of the employee stock ownership plan and violated sections of ERISA law. Specifically, the complaint claims the Company failed to prudently manage the Plan's investments in Bear Stearns stock and continued to maintain Bear Stearns stock as the Plan's sole investment when it was no longer prudent for participants' retirement savings. The lawsuit also claims the Plan's fiduciaries failed to provide participants with complete and accurate information, and failed to properly monitor participants on the fiduciary board.
The lawsuit claims as a result of these actions, Plan participants suffered substantial losses, resulting in the depletion of hundreds of millions of dollars in retirement savings and anticipated retirement income. The complaint states that Bear Stearns heavily invested in the sub-prime mortgage market, including CDOs and other mortgage-backed securities and by some accounts was the biggest packager of residential U.S. mortgage-backed securities from 2004 until 2007. Eventually Bear Stearns had tens of billions of dollars invested in sub-prime loans and hedge funds heavily invested in bonds backed by sub-prime mortgages. This combination created not only an unacceptable and imprudent risk for anyone invested in Company stock, but also an incredibly unstable amount of debt, which couldn't be sold.
Throughout 2007, the cards began to fall and the Company's profits fell 90 percent, including a loss of $859 million in the fourth quarter alone. In early 2008, reports of inquiries into the Company's hedge funds collapse and dropping stock prices didn't deter Bear Stearns and it continued to make inaccurate statements that the company remained strong. In mid-March 2008, the Company approached JPMorgan and the Federal Reserve to bail the company out and on March 15, 2008 the Company was sold to JPMorgan for $2 per share -- a total of $236 million. The reported rise in JPMorgan's offering price to $10 a share does little to recoup the massive losses suffered by Plan participants.
During the class period the Company stock experienced a tremendous decline -- starting at $157.89 per share on December 14, 2006 and closing with a 98 percent drop on March 17, 2008 at only $3.17 before moving up to the $10 range today on news of JPMorgan's increased offering price. During the time of negotiations and the sale of Bear Stearns to JPMorgan, employees watched helplessly as stock prices continued to drop.
If you wish to consider joining this action, discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Steve Berman of Hagens Berman at 206/623-7292 or via e-mail
Hagens Berman Sobol Shapiro, a law firm with offices in Seattle, San Francisco, Los Angeles, Boston, Chicago and Phoenix, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Hagens Berman Web site (http://www.hbsslaw.com/) has more information about the firm.
Contact: Hagens Berman Sobol Shapiro LLP
Steve Berman
206/623-7292
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