Former Bear Sterns Employees Share $10 Million Settlement

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The effect of business

Employees of Bear Sterns, the financial giant that was among the first failures of the subprime mortgage crisis in 2008, claimed in a lawsuit that the bank mishandled its investments (duh), causing them to lose money in an employee stock ownership plan that was part of a retirement package.  Today, the Southern District Court of New York approved a $10 million settlement to be shared among thousands of employees.  The number may seem big, but it’s really more of a drop in a dingy bucket, accounting for between 10-28% of their total losses in the stock.  According to Reuters, more than 8,400 employees lost about $215 million in the collapse.  The settlement means that the former Bear Stearns (now owned by JPMorgan, who shilled out the settlement money) will never have to answer as to whether they knew their investment plan was unsustainable and risky.  If it went to court, in light of the recent $25 billion federal mortgage settlement, I’d like to think they’d have little to say in response.

For some laughs, here’s Mad Money’s Jim Cramer promising that Bear Stearns was not in trouble mere days before its complete failure and sale.