Bear Stearns Ethics are on display in this article. We study the meanin of Materiality in Intermed I and again in Auditing. This article points out that the outside auditors mention that the pricing of securities in BS Hedge Funds was at best an estimate, the difference between that and reality could be material.
Turns out it was material, so much so that the entire $1.6 B High Grade Structured Credit Strategies Enhanced Fund (can you say that without catching your breath) went broke. Lawsuits are now flying. BS of course denies any guilt though investors say they promoted the scheme like a bank account.
I asked a few weeks back whether there was any difference in what Skilling Fastow Lay did at Enron and what BS did in this so called Hedge Fund, the results were the same, everyone lost everything. Now Skilling is appealing his sentence and BS is denying their guilt, Can someone tell me the diference here?
Professor Elam 
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