Epstein Secrets

led 02/27/09 Page 23 of 347 throughout the Class Period. During the Class Period, when the price of Bear Stearns' shares was artificially inflated, Schwartz sold 91,233 shares for a total realized value of $9,867,001. 25. Defendant Warren J. Spector ("Spector") was Co-President, Co-COO of the Company f

) of the Exchange Act (Against the Officer Defendants) 214 COUNT III For Violations of Section 20A of the Exchange Act (Against Defendants Cayne, Schwartz, Spector, Molinaro, Greenberg, and Farber) 215 vi EFTA00316720 Case 1:08-cv-02793-RWS Document 102 Filed 02/27/09 Page 8 of 347 PRAYER FOR REL

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

e value of level three assets and the Company's VaR, as described in paragraphs 589 to 790 below. 466. Moreover, as alleged in 1 274 to 278 above, Schwartz offered false reassurances to the public while the Company's liquidity plummeted the week of March 10, 2008. On March 10, 2008, the Company's liqui

7. 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 the Company's 2007 Form 10-K. 359. As explained above and in the Company's regulatory

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

overing any more Bear Stearns risk. 793. Furthermore, according to the 2008 OIG Report, the Company informed TM on March 12, 2008, the same day as Schwartz's statement, that "Bear Steams paid out $1.1 billion in disputes to numerous counterparties in order to squelch rumors that Bear Steams could not m

any's liquidity pool on March II, 2008, even adjusting for the customer protection rule, stood at $15.8 billion. 788. On March 12, 2008, Defendant Schwartz, Bear Steams' CEO, appeared on CNBC and said that the Company's liquidity position and balance sheet had not weakened at all. "We finished the year

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

October 1996. He became Executive Vice President of Bear Stearns in December 2001 and Chief Operating Officer in August 2007. 12. Alan Schwartz ("Schwartz") became Co-President and Co-COO of Bear Stearns on June 25, 2001. He was named the President of Bear Stearns on August 5, 2007 and became the Chie

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