Deloitte and Bear Stearns face $1bn law suit

Liquidators of two Bear Stearns mortgage hedge funds, which collapsed last
year, filed a suit on Monday against the bank and its auditor, Deloitte &
Touche, in an attempt to recover more than $1bn (£0.5bn) in losses.

The suit, filed in US District Court in Manhattan by Geoffrey Varga and
William Cleghorn, claims Bear, the managers of the hedge fund, and Deloitte
failed to living up to assurances that the funds were relatively safe and
conservative investment vehicles,

The liquidators claim Bear Stearns and its hedge fund managers ‘conceived,
marketed and managed hedge funds that they knew would be viable so long as – but
only so long as – the US housing market continued to rise’.

The suit – which also seeks punitive damages – accuses the company, the fund
managers, and Deloitte of violating their fiduciary and professional duties,
claiming Deloitte’s preparation of the funds’ audits was ‘at a minimum

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