Bear Stearns ordered to pay $159 m for hedge fund due diligence failure

Securities broker Bear Stearns Securities Corp. has been ordered to pay $159 million to the estate of a failed offshore hedge fund for ignoring red flags about the fund’s fraudulent operating practices.
The judgment at the U. S. Bankruptcy Court for the Southern District of New York is a huge boost for creditors of the British Virgin Islands-registered, New York-based Manhattan Investment Fund Ltd., whose net insolvency before the ruling was $391 million.