Jury Clears Two Mutual Fund Executives of Fraud Charges
A federal jury cleared two mutual fund executives of fraud charges brought by the SEC alleging that the defendants falsely assured investors that the money market fund their firm managed could avoid falling below a $1.00 net asset value (aka breaking the buck). The jury did conclude that the firm was liable for fraud and that one of the executives was liable for negligence. The case involves a money market fund that ultimately did break the buck as a result of purchasing Lehman bonds that became essentially worthless. The defendants indicated that they would appeal the findings of liability, and the SEC claimed victory for the findings against the firm.