The
As a result of the ongoing investigation, Bear Stearns has set aside an additional $100 million for legal fess, on top of the $97.8 million it already put into reserve in the fourth quarter. The $200 million charge will impact Bear's second-quarter earnings, the firm said.
Bear Stearns originally expected second-quarter earnings of $365.1 million, or $2.56 a share, which would have produced a 5% year-over-year increase, according to The Wall Street Journal. Now, the firm has revised those results to $298.1 million, or $2.09 a share, for a negative return of 14%, the firm's SEC filing showed.
The SEC has told Bear it intends to recommend civil action against the investment banking and brokerage powerhouse, which has been bracing for regulatory action--in its securities clearing, prime brokerage and private client units--for the past year. To date, Bear Stearns has fired nine employees, and at least eight current and former employees have reportedly been given the heads up that the SEC is planning enforcement action against them.
Bear could be facing a fine between $200 million and $300 million, sources told the Journal.