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Bents Sue Independent Trustees of Reserve Primary Fund

Bruce Bent and his son, managers of the Reserve Primary Fund that broke the buck in September 2008, are suing the independent trustees of that fund for misappropriation of assets, fraud and other misconduct.  Among other things, the Bents are claiming that the independent trustees:

  • Had a substantial, if not controlling, role in almost all conduct with which the Bents are being sued for in a class action, and therefore should contribute to any liability incurred by the Bents;

  • Reneged on a promise to have the fund reimburse the adviser for advancing the trustees’ compensation;

  • Fraudulently induced the adviser to continue managing the fund during its liquidation and advance millions of dollars in fund expenses by falsely promising that they would cause the fund to reimburse the adviser for, at a minimum, its out-of-pocket expenses; and

  • Falsified evidence by altering previously approved board minutes  -- according to the Bents, the “true statements [were replaced] with fabrications designed to create the false impression that the Bents made untrue statements to [the board] concerning redemptions on September 15.”