Bear Stearns Ordered to Pay $1-Million Fine

Bear Stearns Cos. has been ordered to pay $1 million in punitive damages to a pair of customers of A.R. Baron & Co., an arbitration panel has decided.

The fine, reported by the Wall Street Journal on its Web site, was ordered after the panel decided that Bear Stearns “aided and abetted, with knowledge, a criminal and fraudulent enterprise.”

A.R. Baron was a New York-based brokerage that was shut down by regulators in 1996 after it was accused of manipulating and initiating trades without investor authority in the amount of $75 million.

The arbitration panel levied the fine after it heard a case filed by Ireland-based investors Bernard and Maureen McDaniel. The pair had invested more than $1 million through A.R. Baron and ended up losing more than $800,000.

A spokeswoman for Bear Stearns, Elizabeth Ventura, told the Journal that her company intends “to take all available legal options to overturn this decision.”