Reserve Management Co., as well as other unnamed defendants, denied charges March 11 that the Securities and Exchange Commission brought against it for issuing false and misleading statements to public investors, and demanded a jury trial.
The Reserve Management Co., a manager of the once $62 billion Reserve Primary Fund, denies that in September 2008 it campaigned to have the public invest in a company that was going bankrupt. It also denies publishing false statements assuring shareholders of the stability of the fund. The fund, which held $785 million dollars in Lehman Brothers securities, couldn't redeem its money once Lehman Brothers went bankrupt. This caused the fund's net assets to drop below $1 a share, which is called "breaking a buck."
The SEC filed a civil action against Reserve Management in May 2009. Its founder, Bruce Bent, and his son Bruce Bent II, who served as co-chief executive, denied all charges.
For more information on this story and the court case follow this link: http://online.wsj.com/article/SB10001424052748704349304575115931826768808.html