Bear Stearns To Pay $10m For Bad Advice
This article appears courtesy of Institutional Investor
A federal court jury in New York has fined Bear Stearns with a $10 million for giving bad advice to executives of start-up Internet companies, The New York Post reports. The jury found Bear Stearns guilty of five counts of fraudulent and negligent behavior when in 2000 it advised the owners of Internet service providers who sold their companies to ClearData Communications to give up their shareholder rights to $13 million should ClearData not complete an initial public offering.
Attorney Tom Brown of the law firm Orans, Elsen & Luperts, who represented the ISP owners, said Bear Stearns acknowledged, "under oath" that the company's fund-raising wasn't going well and that there was "no real plan" for an IPO, according to the Post.