Another Bear Stearns Exec Warned of SEC Action
Regulators looking into Bear Stearns' (BSC) role in the mutual fund trading scandal are considering bringing an enforcement action against a second top executive in the firm's securities clearing operation.
The Securities and Exchange Commission has notified Michael Zackman, a Bear Stearns senior managing director, that he could face civil charges for assisting hedge funds and brokers engaged in abusive trading of mutual fund shares. The SEC's New York office, which is heading up the 16-month-old investigation, notified Zackman of its intentions last month, according to a copy of his broker registration statement obtained by TheStreet.com.
Zackman, responsible for overseeing Bear's relationships with the hundreds of small brokerages that clear stock trades through the firm, has been on a leave of absence for nearly a year. On his registration statement, Zackman said "there is no basis for the SEC to bring a proceeding against him in this matter."
Martin Auerbach, Zackman's attorney, could not be reached for comment.TheStreet.com reported last week that Peter R. Murphy, another senior managing director and one of the highest-ranking executives in the clearing division, also received a so-called Wells Notice from the SEC. Murphy, who also denies doing anything wrong, remains in his current post. In all, at least six current and former Bear employees are facing potential civil charges in the investigation, including Vincent Dicks, a top manager in Bear's private client group. People familiar with the investigation say regulators are continuing to investigate the matter and additional Wells notices against other employees may be soon forthcoming. The looming regulatory actions against the employees come nearly seven months after the SEC first notified Bear that it is considering bringing a civil action against the firm and its large clearing subsidiary. Late last year, the firm increased its litigation reserve by about $100 million to cover the cost of a potential settlement with securities regulators.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV