Judge Rules Against Clawbacks In Reserve Fund Suit

Law360, New York (January 13, 2010, 7:05 PM EST) -- Shareholders who redeemed holdings in the Reserve Primary Fund just before its assets were frozen amid a massive 2008 bank run will not face clawbacks if they are currently broke, a judge has ruled in a case seeking to fairly sort out distributions from the fund to investors.

Judge Paul G. Gardephe issued an order Tuesday in the U.S. District Court for the Southern District of New York dealing with a number of issues raised about the so-called “straddler” investors, who managed to redeem some shares...
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