Deutsche Fired, Bear Stearns Fights Back

Bloomberg reports that Deutsche's UK fund management business has lost another major mandate. The news agency says that the $1.8bn Lothian Pension Fund is the latest UK client to terminate its contract with the firm. Clients are now said to have redeemed in excess of $10bn in the third quarter.

Lothian Pension Fund said in an e-mail earlier this week that 'after a detailed review, concerns over process and resources/personnel changes resulted in Deutsche Assets Management's contract being terminated'.

Last month Deutsche confirmed that it had launched an internal investigation to find the identity of the 'mole' who had leaked the fact that its asset management arm was losing mandates. Unfortunately it looks as if the mole has gone to ground as no-one is believed to have been fingered.

Bear Stearns will soon go before a jury in Alabama, accused of knowingly selling $15m in bonds in a WorldCom unit to investors when, it is claimed, the firm knew that WorldCom was in trouble. Michael Rediker, a lawyer acting for the investors, has said that 'they may be a small player, but the fact is, their research analyst was privately concerned about WordCom, and we believe they were angling for more work down the road'.

Other firms may cave and have paid up, but Bear intends to fight. A spokesman has said that 'we had no investment-banking relationship with WorldCom whatsoever, and we don't feel we should have been included in this action'.

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