SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 5, 1999
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THE BEAR STEARNS COMPANIES INC.
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Exact name of registrant as specified in its charter
DELAWARE File No. 1-8989 13-3286161
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
245 Park Avenue, New York, New York 10167
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (212) 272-2000
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Not Applicable
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(former name or former address, if changed since last report)
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Item 5. Other Events.
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Filed herewith is a copy of The Bear Stearns Companies Inc. ( the "Company")
Press Release, dated August 5, 1999, announcing that Bear, Stearns Securities
Corp., the Company's correspondent clearing subsidiary, has settled an
administrative proceeding filed by the United States Securities and Exchange
Commission.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(a) Financial Statements of business acquired:
Not applicable.
(b) Pro Forma financial information:
Not applicable.
(c) Exhibit:
(99) Press Release, dated August 5, 1999.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE BEAR STEARNS COMPANIES INC.
By: /s/ Samuel L. Molinaro Jr.
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Samuel L. Molinaro Jr.
Senior Vice President - Finance and
Chief Financial Officer
Dated: August 5, 1999
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<PAGE>
THE BEAR STEARNS COMPANIES INC.
FORM 8-K
CURRENT REPORT
EXHIBIT INDEX
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Exhibit No. Description
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(99) Press Release, dated August 5, 1999
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CONTACT: Hannah Burns
(212) 272-2395
For Immediate Release
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New York, New York --- August 5, 1999 --- The Bear Stearns Companies Inc.
announced today that Bear, Stearns Securities Corp. (BSSC), the firm's
correspondent clearing subsidiary, has settled an administrative proceeding
filed by the United States Securities and Exchange Commission (SEC) resolving
allegations relating to the firm's role as clearing broker for A. R. Baron & Co.
Under the terms of the agreement, BSSC, without admitting or denying any
wrongdoing, has agreed to the payment of a fine of $5 million and to the
establishment of a restitution fund of $20 million which will be used to settle
certain private claims.
Separately, BSSC has entered into an agreement with the New York County District
Attorney's Office (NYDAO), in which it has agreed to pay $1.5 million to the
NYDAO for the costs of the investigation. BSSC has further agreed to an
additional $10 million contribution to the restitution fund under the terms of
the SEC agreement and payments of $1 million to the State of New York and $1
million to the City of New York. BSSC has been informed that the District
Attorney has stated that no criminal or other charges will be filed against BSSC
or Bear Stearns.
The company said that settling these matters was a prudent business decision
undertaken to end what has become a distraction for the company, its
shareholders, its employees and its customers. On the most serious charges, BSSC
was technically "a cause" of Baron's fraud on a negligence-based standard.
Settling on this basis was in the company's best interest. The company will
suffer no material financial or operational consequence as a result of these
agreements. The company is looking forward to moving ahead with its
correspondent clearing business and its role as an industry leader.
In a related matter, Richard Harriton, senior managing director and president of
BSSC, has announced that he has resigned from Bear Stearns and that he will
resist the charges brought by the SEC.
James E. Cayne, president and chief executive officer of The Bear Stearns
Companies Inc., said, "We are disappointed that Dick is leaving, but we
understand that his considerations as an individual are different than ours as a
corporation. We respect his decision."
The company also announced that Michael Minikes, a senior managing director and
treasurer of Bear Stearns, and Richard Lindsey, a senior managing director in
the Correspondent Clearing Department, will succeed Mr. Harriton as
co-presidents of BSSC.
Commenting on the new appointments, Mr. Cayne said, "We have an unwavering
commitment to the correspondent clearing business. This new partnership is a
unique leadership combination offering our clients Michael's longstanding
involvement in our clearing business and its client base, and the fresh infusion
of Richard's extensive expertise in the financial markets, their regulatory
framework and the technology that drives them. We are confident that Mike and
Richard will set the stage for BSSC's continued growth and success into the next
millennium."
Michael Minikes joined Bear Stearns in 1978, became a general partner in 1979
and a senior managing director at the time of the firm's incorporation in 1985.
He has been instrumental in the growth of the firm's extensive clearing network,
particularly in financing and securities lending activities. He is chairman of
the firm's Operations Committee and a member of the Institutional Credit,
Funding, and Internal Audit Committees and a member of the board of directors of
all the firm's principal subsidiaries, including BSSC. He is also chairman of
the Bear Stearns Mutual Funds Board. Mr. Minikes is a former chairman of the
board of International Depository & Clearing, Inc., a past board member of
Depository Trust Company, a past board member of the Securities Industry
Automation Corp., and the former chairman of the Securities Industry
Association's Capital Committee.
Richard Lindsey joined Bear Stearns in March of 1999 from the Securities and
Exchange Commission where he was director of the Division of Market Regulation.
In this capacity he was the principal regulator of the US securities markets,
clearance and settlement systems and the investment banking community. Prior to
joining the SEC, Mr. Lindsey was a professor of finance at the Yale University
School of Management where he also consulted on risk management, proprietary
trading and the pricing of derivative instruments. He has also held positions at
the Nikko Research Institute in Tokyo and at the New York Stock Exchange. Since
joining Bear Stearns, Mr. Lindsey has assumed a number of responsibilities,
including chairman of the firm's Internet Committee and serving on the
Operations Committee and the board of Strike Technologies.
Over the past 25 years, BSSC has grown from a handful of clients to 2,700 fully
disclosed and professional clients. Today Bear Stearns is the recognized leader
in domestic and international securities clearing and financing for broker
dealers, hedge funds, money managers, arbitrageurs, specialists and other
professional investors. BSSC clears trades in over 70 countries and accounts
daily for more than 10% of the New York Stock Exchange volume cleared through
the National Securities Clearing Corp. As of June 30, 1999, client count had
reached 2,700, margin debt balances were $44 billion, and average daily
transaction volume was approximately 200,000 trades per day, up 30% from the
previous year.
The Bear Stearns Companies Inc. is the parent company of Bear, Stearns & Co.
Inc., a leading worldwide investment banking and securities trading firm. With
approximately $20.1 billion in total capital, Bear Stearns serves governments,
corporations, institutions and individuals worldwide. The company's business
includes corporate finance and mergers and acquisitions, institutional equities
and fixed income sales and trading, private client services, derivatives,
foreign exchange and futures sales and trading, asset management and custody
services. Through Bear, Stearns Securities Corp., it offers professional and
correspondent clearing, including securities lending. Headquartered in New York
City, the company has approximately 9,800 employees located in domestic offices
in Atlanta, Boston, Chicago, Dallas, Los Angeles and San Francisco; and an
international presence in Beijing, Buenos Aires, Dublin, Hong Kong, London,
Lugano, Sao Paulo, Shanghai, Singapore and Tokyo.
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