Beginning Next Week: InsideCounsel will become part of Corporate Counsel. Bringing these two industry-leading websites together will now give you comprehensive coverage of the full spectrum of issues affecting today's General Counsel at companies of all sizes. You will continue to receive expert analysis on key issues including corporate litigation, labor developments, tech initiatives and intellectual property, as well as Women, Influence & Power in Law (WIPL) professional development content. Plus we'll be serving all ALM legal publications from one interconnected platform, powered by, giving you easy access to additional relevant content from other InsideCounsel sister publications.

To prevent a disruption in service, you will be automatically redirected to the new site next week. Thank you for being a valued InsideCounsel reader!


Failed market-money fund president reaches settlement with shareholders

Bruce R. Bent II of the Reserve Primary fund agrees to settle the lawsuit worth $54.9 million

The financial crisis is slowly becoming only a memory in the minds of many on Wall Street, but the fallout continues to trickle in on a day-to-day basis. The latest shareholder settlement is one of the largest yet.

Bruce R. Bent II, president of the Reserve Primary market-money fund that failed during the financial crisis, agreed to settle a shareholder lawsuit worth about $54.9 million yesterday. The fund was worth $62.5 billion at the time of its collapse.

According to Bloomberg, Bent and his father are among the defendants that have agreed to pay $10 million in cash, withdraw their claim for $42.4 million from a court-funded expense fund and allow $2.5 million of that expense fund cash to go to shareholders. However, as a term of the settlement, none of the defendants claim any wrongdoing.

Back in 2010, the shareholders attempted to take Bent to a jury trial. The closest they ever got, however, was when a federal jury found Bent negligent on one count of violating securities law. The jury absolved his father of all wrongdoing.

The Reserve Primary fund originally held $785 million in Lehman Brothers Holdings Inc. debt. Its failure was triggered when, according to Bloomberg, it “broke the buck” by failing to maintain a $1-a-share net asset value. Shareholders filed suit against the fund in September 2008, two days after Lehman went bankrupt.

The fund’s closure resulted in global credit markets freezing, as investors scrambled to sell holdings to meet redemptions. The situation only became calm once again when the U.S. Treasury guaranteed money-fund shareholders against default for one year.


The SEC has been busy already in September. For more InsideCounsel stories dealing with the commission, read on:

SEC charges former VP in fair disclosure rules violations

SEC charges money manager with fraud

Social media: boon to business or compliance death trap?

SEC will not appeal foreign disclosure ruling for oil & gas industry  

Assistant Editor

author image

Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.