The International Swaps and Derivatives Association and a group of financial lawyers sponsored by the Federal Reserve (the Financial Markets Lawyers Group) have backed a Bear Stearns’ court appeal. In February this year, Bear Stearns was deemed liable for $125 million that fraudulent hedge fund the Manhattan Investment Fund, had deposited in the prime brokerage account it held at the investment bank before it filed for bankruptcy. The bankruptcy court concluded that Bear Stearns was liable for the deposits as their “initial transferee”.
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