Expensive Bear Suit:
Beverly Hills billionaire H. Roger Wang is suing Bear Stearns for allegedly duping him and his wife into buying 150,000 shares of Bear stock in the weeks before its collapse. The total purchase included 100,000 shares bought on March 14 — the day the Fed acted to bail the firm out.
The suit, filed in early May in Los Angeles County Superior Court, alleges fraud and breach of fiduciary duty. It names as defendants brokers Joey Zhou and Garrett Bland, a senior managing director in Bear's Century City office. The suit claims the 59-year old Wang and his wife agreed to pay $6.56 million for Bear stock at prices ranging from $71.96 to $33.44 a share from March 6 to March 14.
Wang says Bear illegally liquidated the account on March 18 after he and his wife refused to send in the money to pay for the trades. The liquidation value of the stock, according to the suit: $947,324, or $6.32 a share. Wang, who has a net worth of $1.3 billion according to Forbes magazine, is the founder of Golden Eagle International Group, a real estate development firm in Nanjing, China that generated more than $1 billion in revenue last year.
Bad Bear Broker Avoids Cage
Ken Okada, a former Bear Stearns broker, was sentenced to three years of probation, including one year of “home confinement,” and fined $300,000 after pleading guilty to playing a part in an insider-trading scheme. Okada was one of 13 people criminally charged in the case, which netted $17.5 million for the participants. Mr. Okada was involved in using stock recommendations from UBS stock analysts — before they were made public — to execute hundreds of trades.
SEC Freeze
The SEC froze the assets of San Diego investment advisor, Plus Money, under suspicion of fraud. The SEC alleges that since May 2004, Plus Money and its principal, Matthew La Madrid, have managed the Premium Return Funds, hedge funds that raised $30 million from roughly 300 investors who were told the funds would engage in a covered-call options strategy. Unbeknownst to investors, La Madrid stopped using the strategy six months after starting the fund. He instead began using their money to fund his own investments: He transferred $5 million of investor money to his own brokerage account, $1.8 million to several real estate companies and used $95,000 to purchase two cars.