A lawsuit against JPMorgan Chase & Co. by liquidators of two Bear Stearns Cos. hedge funds seeking $1.5 billion over their collapse formally ended today after the parties reached a settlement in June, according to court records.
Bear Stearns Cos., two of its former managers, and auditor Deloitte & Touche were accused of misleading investors in two hedge funds with holdings in subprime mortgages that imploded and filed for bankruptcy in July 2007.
Two former Bear Stearns fund managers who were named as defendants, Ralph Cioffi and Matthew Tannin, were acquitted after a federal trial in Brooklyn New York in 2009 of charges they misled investors in the funds’ losses of $1.6 billion.
The complaint was filed by Stillwater Capital Partners LP of New York, Essex Fund Ltd. of the Cayman Islands and Geoffrey Varga and William Cleghorn, two liquidators appointed in the Caymans to recover losses for investors in “feeder funds.”
The parties filed a stipulation with U.S. District Court Judge Alvin Hellerstein today asking him to dismiss all claims and counterclaims, citing an accord that was originally reached last year. The judge issued a June 13 order that he would close the case within 90 days if a settlement hadn’t been consummated.
JPMorgan bought Bear Stearns in 2008.
The case is Varga v. The Bear Stearns Cos., 08-03397, U.S. District Court, Southern District of New York (Manhattan).