A lawyer for the failed Reserve Primary Fund told the federal judge he's hopeful about reaching a settlement in a lawsuit filed by the U.S. Securities and Exchange Commission.
The SEC sued managers of Reserve Primary in May 2009, accusing them of misleading shareholders about the safety of the fund after it suffered losses on Lehman Brothers Holdings Inc. debt. Reserve's net asset value fell below $1 a share on Sept. 16, 2008, making investors vulnerable to losses and triggering a run on money-market funds that worsened the global financial crisis.
A three-week trial is set to begin Oct. 1 before U.S. District Judge Paul Gardephe in Manhattan. At a pre-trial hearing yesterday, the judge asked both sides whether they had held settlement discussions.
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