The suit, filed in U.S. District Court in Manhattan,accuses Bear, the managers of the hedge fund, and Deloitte, of not living up to assurances that the funds were relatively safe and conservative investment vehicles.
The liquidators added that the funds were never designed to withstand even a “slight downtick” in the housing market. Bear Stearns and its hedge fund managers “conceived, marketed and managed hedge funds that they knew would be viable so long as – but only so long as – the U.S. housing market continued to rise,” the suit said.
The suit charges that the company, the fund managers, andDeloitte violated their fiduciary and professional duties. The suit said Deloitte’s preparation of the funds’ audits was “at a minimum negligent.”
The suit is also seeking punitive damages…