It looks like the SEC and Bruce Bent and his team won't be settling the fraud accusations against Bent and the Reserve [see profile] any time soon. Reuters' Jonathan Stempel and Rachelle Younglai report that the settlement discussions in the civil fraud lawsuit fell apart last month, citing a court filing describing an "impasse."

For the full story on the the death of the Reserve and its Primary Fund, see MFWire's timeline.

The SEC filed suit against Reserve, Bent (its chairman and founder) and his son in May 2009, after Reserve's $62-billion Primary money market fund broke the buck (i.e. its NAV fell below $1 per share, in this case to $0.97) in September 2008 in the wake of Lehman Brothers' collapse. The suit accuses Bent and company of tricking investors into thinking the fund was safe.

The defendants reportedly want the suit put on hold, thanks to their accrued legal fees and the delay in receiving management fees. (They claim to be owed more than $30 million in fees, plus expenses.) As of July 16 of this year, Reserve had distributed $50.7 billion, about 99.04 percent of Primary's assets from September 15, 2008. 

Edited by: Neil Anderson, Managing Editor


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