As expected,
Regulators found phone records implicating supervisors and evidence of a market-timing trading desk Bear had set up.
"Bear Stearns was the hub that connected the many spokes of market timing and late trading--hedge funds, brokers and mutual funds," said the SEC's director of the Northeast regional office, Mark Schonfeld. "Tape-recorded phone calls of its employees employees make plain the two roles played by Bear Stearns that were fundamental to mutual fund trading abuses." This included allowing market timing and late trading and trying to prevent mutual fund companies from detecting it, Schonfeld said.