An Alabama judge Wednesday allowed a jury to hear that Bear Stearns Cos. settled claims by state securities regulators who accused the firm of issuing tainted analyst research.
Alabama Securities Commissioner Joe Borg was permitted to testify about the August 2003 settlement at the trial of a lawsuit by a state pension fund that sued Bear Stearns over bonds backed by WorldCom Inc. The Retirement Systems of Alabama, which bought the bonds, claims Bear Stearns misled the fund by touting the securities while its analysts were telling the firm’s investment bankers that WorldCom’s finances were in decline.
Bear Stearns paid more than $300,000 to resolve the claims without admitting wrongdoing. “It looked like a pattern across Wall Street,” Borg told the Montgomery, Ala., jury.
Borg testified about the settlement over the objections of lawyers for Bear Stearns, who said the testimony was irrelevant and would unfairly prejudice the jury.