Bear, Stearns & Co., Inc. and Bear, Stearns Securities Corp.

Latest Action: On December 8, 2008, the SEC published Notice of the Proposed Distribution Plan and Opportunity for Comment, which specifies where you can read the Distribution Plan, how copies of the Proposed Plan can be obtained and describes the process by which persons can comment on the Plan. Those who wish to provide their comments on the Distribution Plan must submit them, in writing, no later than January 7, 2009.

After publication and comment, the proposed Distribution Plan will be submitted to the SEC for approval. When the SEC approves the proposed distribution plan, with modifications as appropriate, distributions will begin pursuant to that plan. The SEC anticipates that distribution will begin in spring of 2009.

Background: On March 16, 2006, the SEC instituted and settled administrative and cease-and-desist proceedings against Bear, Stearns & Co., Inc. and Bear, Stearns Securities Corp.  The SEC alleged that Bear Stearns facilitated unlawful late trading and deceptive market timing of mutual funds by its customers and customers of its introducing brokers.

As part of the settlement, the respondents must pay $250 million, consisting of $160 million in disgorgement and $90 million in civil penalties for distribution to the mutual funds and shareholders harmed as a result of market timing and late trading.  For more information on the SEC’s action, you can read In the Matter of Bear, Stearns & Co., Inc. and Bear, Stearns Securities Corp., 33-8668 (Mar. 16, 2006).

http://www.sec.gov/divisions/enforce/claims/bearstearns.htm