Thousands of former Bear Stearns Cos. (BSC) employees will share a $10 million settlement of lawsuits claiming they lost money on the bank’s stock in their retirement accounts.
Two ex-Bear Stearns employees yesterday asked a federal court judge in Manhattan to approve the settlement on behalf of an estimated 8,400 former colleagues.
The settlement will resolve class-action suits filed beginning in 2008 against Bear Stearns and other defendants by former employees of the bank. The employees, participants and beneficiaries of Bear Stearns’s employee stock ownership plan who held shares of the bank’s common stock, claimed risky investments in subprime mortgages caused them to lose money.
JPMorgan Chase & Co. (JPM) bought Bear Stearns in March 2008 when the firm was on the brink of failing.
The parties engaged in mediation in October 2009 and pursued negotiations in telephone conferences through the end of last year, the investors said in court papers seeking approval for the agreement. They said the settlement may equal 10 percent to 28 percent of the losses to the stock ownership plan.
The case is In re Bear Stearns Cos. Securities, Derivative and ERISA Litigation, 09-MDL-1963, U.S. District Court, Southern District of New York (Manhattan).
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