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Last September, the Reserve Primary Fund broke the buck and froze its assets and now it's paying the price. In a complaint filed today, the SEC alleged that the Reserve Management Company, Inc. (RMCI), its Chairman Bruce Bent Sr., its Vice Chairman and President Bruce Bent II, and Reserve Partners, Inc., failed to provide key material information to investors, the fund's board of trustees and rating agencies as Lehman Brothers filed for bankruptcy protection on September 15. "Defendants engaged in a systematic campaign to deceive the investing public into believing that the Primary Fund their flagship money market fund was safe and secure despite its substantial Lehman holdings," according to the complaint. At that time, the Reserve Fund allegedly held $785 million in Lehman debt securities.
