Epstein Secrets

109 3. Inflation of Capital By Using Incorrect Marks 110 V. 4. Misrepresentations to Regulators Relating to VaR DEFENDANTS' SCIENTER 112 A. James E. Cayne 112 B. Alan D. Schwartz 115 C. Samuel L. Molinaro. Jr. 116 D. Warren J. Spector 120 E. Alan C. Greenberg 121 F. Michael J. Alix 123

ns: mortgages originated by BEARRES and ECC that were sent directly into the securitization process at Bear Steams. CAO: Center for Audit Quality. Cayne: James E. Cayne, a director, Chairman of the Board and Chief Executive Officer of Bear Stearns during the Class Period. Cioffi: Ralph Cioffi, the B

ear Steams. On August 5, 2007, he was also appointed COO. During the Class Period, when the price of Bear Steams' shares was artificially inflated, Molinaro sold 38,552 shares for a total realized value of $4,230,828. 28. Defendant Michael Alix ("Alix") was the Senior Managing Director and Global Head

sks" but that TM documents did not reflect "how the Company dealt with default risks." 106. Defendant Cayne, the CEO of the Company, and defendant Molinaro, the CFO of the Company, were aware of the SEC's concerns about Bear Steams risk management program. According to a February 8, 2008 presentation b

internal control structure and procedures of the issuer for financial reporting. 357. In connection with the Company's 2006 Form 10-K, Defendants Cayne and Molinaro executed the applicable Rule 302 certification. 358. Defendants Schwartz and Molinaro filed identical certifications with respect to

olders' equity was 18.3%. "We are pleased with this excellent performance, revenues for the first quarter were up for every business segment," said James E. Cayne, chairman and chief executive officer of The Bear Steams Companies Inc. "Growing the company remains a core focus as we 164 EFTA00316892 Case 1:

tion with the Company's 2006 Form 10-K, Defendants Cayne and Molinaro executed the applicable Rule 302 certification. 358. Defendants Schwartz and Molinaro filed identical certifications with respect to the Company's 2007 Form 10-K. 359. As explained above and in the Company's regulatory filings, in d

2006 Earnines Conference Call 598. On December 14, 2006, Bear Steams held its fourth quarter 2006 earnings conference call, conducted by defendant Molinaro, the Company's CFO. During the call, Molinaro repeated the financial results set out in paragraphs 590 above. These statements were false and misle

sibility for the initial investment analysis, purchase decisions, ongoing financial analysis and sale decisions relating to Bear Stearns stock. 9. James Cayne ("Cayne") was the Chief Executive Officer of Bear Stearns from 1993 until January 2008 and Chairman of the Board from 2001 until Bear Stearns' coll

he initial investment analysis, purchase decisions, ongoing financial analysis and sale decisions relating to Bear Stearns stock. 9. James Cayne ("Cayne") was the Chief Executive Officer of Bear Stearns from 1993 until January 2008 and Chairman of the Board from 2001 until Bear Stearns' collapse in

nstruments was $19.725 billion. 30. All of the SEC filings referred to herein which had been read and relied upon by Epstein had been certified by Molinaro as the CFO of Bear Stearns and, with the exception of the 200710-K, all of the SEC filings referred to herein had been certified by Cayne as the CE

mark disputes; and (iii) falsely inflating its net capital by using misleading methods to calculate VaR. (iv) Internal Controls 732. Defendants Cayne and Molinaro each made false and misleading statements when they executed Sarbanes Oxley Act certifications, annexed as an exhibit to the Form 10-Q

aterial respects the financial condition." 188 EFTA00316916 Case 1:08-cv-02793-RWS Document 102 Filed 02/27/09 Page 204 of 347 733. Cayne and Molinaro also certified that the Company had: resigned such internal control over financial reporting, or caused such internal control over financial report

tements and certifications were materially false and misleading when made. 5. November 14, 2007 Write Downs 736. On November 14, 2007, Defendant Molinaro announced that Bear Stearns would write down $1.2 billion of its assets in the fourth quarter. However, Molinaro misleadingly attempted to reassure