Deloitte settles Bear Stearns shareholder lawsuit
(Reuters) - Deloitte & Touche LLP agreed to pay $19.9 million to settle litigation brought by former Bear Stearns Cos shareholders who claimed they were misled about the investment bank's deteriorating health by its former auditor.
The all-cash settlement was disclosed late Monday in the U.S. district court in Manhattan.
It was announced five days after JPMorgan Chase & Co (JPM.N), which bought Bear in 2008, agreed to a $275 million settlement to resolve claims against Bear and several one-time Bear executives, including two former chief executives, James Cayne and Alan Schwartz, and a former chairman, Alan "Ace" Greenberg.
Both settlements require approval by U.S. District Judge Robert Sweet in Manhattan. The defendants did not admit wrongdoing.
Jonathan Gandal, a Deloitte spokesman, said: "We are pleased to resolve this matter to avoid the expense, distraction and uncertainty of continued litigation."
Investors led by the State of Michigan Retirement Systems had accused Deloitte of making misstatements in connection with its audits of Bear's financial statements in 2006 and 2007.
JPMorgan agreed to purchase Bear on March 16, 2008, in an emergency buyout brokered by the U.S. Federal Reserve, as clients were fleeing Bear and causing a liquidity crunch.
It eventually agreed to pay $10 per share for Bear, well below the $170 that Bear shares were once worth. More than $18 billion of market value at Bear was erased.
The settlements cover owners of Bear stock and call options, and sellers of Bear put options, between December 14, 2006 and March 14, 2008.
The case is In re: Bear Stearns Companies Inc Securities, Derivative and ERISA Litigation, U.S. District Court, Southern District of New York, No. 08-md-01963.
(Reporting By Jonathan Stempel in New York)
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