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The Firm chalked up another victory in its complex case against Bear Stearns and its auditors, one of the key pieces of litigation to arise from the financial crisis. The case highlighted deep-rooted deceptions of the banks involved in the crisis. Misleading statements about the investment bank’s financial health and its exposure to the subprime housing market led to a catastrophic collapse in the company’s share values before it was acquired by JP Morgan Chase in May 2008.
The discovery in this case was intense, including the review and analysis of nine million pages of documents and interviews of 95 former Bear Stearns employees. The Firm’s in depth experience and knowledge of the financial markets, matched with its legal expertise, allowed it to direct the litigation to a successful resolution: a $275 million settlement with Bear Stearns and a $19.9 million settlement with Bear Stearns’ auditor, Deloitte & Touche LLP.
The settlement is one of the top 40 class action settlements since the passage of the PSLRA and far above the median in recoveries of similar credit crisis cases.
Months after the approval of this settlement, the federal mortgage task force formed by the Department of Justice filed its first complaint against Bear Stearns, further validating the claims made by investors against the bank.