Bear Stearns ordered to return $160m in Manhattan case

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Bear Stearns was ordered by a federal bankruptcy judge yesterday to return about $160 million ($125.1 million plus interest) to the estate of a failed hedge fund, Manhattan Investment Fund.

The ruling, issued by Judge Burton Lifland, concluded that Bear had not been diligent and timely in investigating possible fraudulent money transfers that Manhattan had used to move assets out of the fund prior to its collapse.

The decision is being seen by some industry observers as something that could increase pressure on prime brokers to oversee their hedge fund clients more closely. 

Michael Berger, founder of Manhattan, moved $141.5