Financial News Online US- A federal judge has granted Bear Stearns a trial before the prime broker can be ordered to pay nearly $160m (\u00c3\u00a2\u00e2\u20ac\u0161\u00c2\u00ac111m), as the bank’s board reportedly considers a succession plan for chief executive James Cayne.<\/p>\n
US District Judge Naomi Reice Buchwald in Manhattan said yesterday a “trial will be necessary” to determine whether Bear Stearns acted in “good faith” when it accepted money for a defunct hedge fund.<\/p>\n
Buchwald ruled on an appeal of a February order by US Bankruptcy Judge Burton Lifland that Bear Stearns pay nearly $160m to investors in the Manhattan Investmen Fund. Lifland had found that Bear Stearns failed to properly monitor the activities of the fund before it collapsed in early 2000.<\/p>\n
The fund, run by Austrian-born manager Michael Berger, lost nearly $400m of investors\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2 money by making wrong bets on Internet stocks during the technology boom of the late 1990s.<\/p>\n