Judge awards $750,000 in case of money fund that 'broke the buck'
By Nate Raymond and Jonathan Stempel
NEW YORK, Sept 30 (Reuters) - The U.S. Securities and Exchange Commission lost much of its bid Monday for civil penalties in a lawsuit arising out of the 2008 collapse of a large money market fund that famously "broke the buck," with a court awarding just $750,000.
U.S. District Judge Paul Gardephe in Manhattan said the SEC had not demonstrated that Bruce Bent II, a co-manager of the Reserve Primary Fund, and two Reserve entities should have to disgorge ill-gotten profits.
The combined penalty was also a small fraction of the more than $130 million that the regulator had sought.
"These entities were in business for decades and committed few regulatory violations," Gardephe wrote. "Their wrongful conduct took place over a period of less than 36 hours and during a time of enormous economic stress."
The decision follows a jury verdict last November that cleared money market pioneer Bruce Bent Sr and Bruce Bent II, his son, of civil fraud charges stemming from the collapse.
The jury found the son liable for negligence, and the corporate entities liable on other counts.
Representatives for the Bents and SEC did not immediately respond to requests for comment.
