PCM Co-Founder Sues Bear Stearns Over Collapse

Law360, New York (September 28, 2009, 5:43 PM EDT) -- The co-founder of investment firm Private Capital Management LP is suing Bear Stearns Cos. Inc., its auditor and two top executives for allegedly deceiving him about the bank's finances in the lead-up to its spectacular collapse in March 2008.

Bruce Sherman, who once held the largest block — 5.9 percent — of Bear Stearns' stock, claims the bank's former CEO James Cayne and Chief Operating Officer Warren Spector fraudulently overstated the value of its mortgage-backed securities, risk management procedures and liquidity to induce him to retain...
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