Plaintiffs get green light to press Bear Stearns case

Plaintiffs in one of the biggest U.S. investor lawsuits stemming from the financial crisis got a boost from a judge, who said a case against fallen investment bank Bear Stearns Cos. Inc. and its outside auditor, Deloitte & Touche, can go forward.

The decision means that one-time Bear Stearns investors can move ahead with a proposed securities class-action fraud case, though the judge threw out two related lawsuits that had been rolled into the litigation. The investors accuse former Bear chiefs of painting a wildly misleading picture of the firm’s finances ahead of its unravelling in March of 2008.

Among the defendants is former Bear chief risk officer Michael Alix, who joined the Federal Reserve Bank of New York in November of 2008 as a top bank regulation adviser. Mr. Alix’s lawyer was not immediately available to comment.

Representatives from JPMorgan Chase & Co, which bought Bear Stearns at a bargain price at the start of the credit crisis, were also not immediately available for comment.

“It is important to recognize that in ruling on the defendants’ motions to dismiss, the court was required to assume that the allegations in the plaintiffs’ complaint were true. At this stage of the case the court was not permitted to and did not consider whether those allegations actually are true or whether the plaintiffs have evidence to support their allegations,” a Deloitte spokesperson said in a statement.

“Deloitte believes that the claims asserted against it are meritless and intends to defend this case vigorously,” the spokesperson said.

Bear Stearns disintegrated when the firm faced a run on the bank following enormous mortgage losses. Bear became the first investment bank to collapse in a credit crisis that later claimed Lehman Brothers Inc. and Merrill Lynch & Co Inc.

The fraud case is one of many investor lawsuits to grow out of the crisis, although plaintiffs in such cases have typically faced an uphill battle to prove their claims. Auditing firms so far have been largely successful in fighting investor lawsuits, although in this ruling the judge said Deloitte would also have to remain a defendant for its role as Bear’s auditor.

In his ruling, U.S. District Judge Robert Sweet in Manhattan refused to dismiss a lawsuit against plaintiffs led by the Michigan Retirement System, which held Bear Stearns shares in its portfolio. That means the fund can continue to press their claims and possibly bring it to trial.

Reached on Sunday afternoon, Thomas A. Dubbs, a partner at Labaton Sucharow and co-lead counsel for the state of Michigan said: “We are pleased by the thorough and comprehensive opinion of the court and expect a detailed announcement from Michigan in the coming days.”

But the judge tossed out two related cases. One was a separate investor lawsuit; the other was brought on behalf of Bear employees who held the firm’s stock in a retirement plan.

The written ruling was made public late on Friday.

At the heart of the securities fraud case is an allegation that Bear Stearns and top executives inflated the investment bank’s stock price by using misleading mortgage valuations to conceal potential losses in the housing market.

The investors also accuse Deloitte of recklessly ignoring red flags about Bear’s financial statements and did not adequately scrutinize its mortgage valuation models. Deloitte’s audits “were so deficient that the audit amounted to no audit at all,” the plaintiffs argued in court papers.

Reuters

Flames edge Canucks in shootout

Alex Tanguay didn't know where the puck was.

And the referees didn't think his backhanded shootout attempt crossed the goal-line until a video review revealed Roberto Luongo slid into the net with the puck caught in his pads.

That controversial goal gave the Calgary Flames a 4-3 win on Saturday, and sent the Vancouver Canucks to their fourth consecutive loss.

“I had no idea,” Tanguay said. “I've made that move a couple of times before and when I put it on my backhand I have no idea where ... I can't see the puck go in.”

The shootout was tied 1-1 when Tanguay skated in on Luongo and got him to sprawl as he went to the backhand.

“He's a goalie I've had some breakaways against,” Tanguay said. “He knows some of my tendencies so I was trying to throw something different at him.”

The goal was waved off at first but the video review showed the puck caught up on Luongo's thigh as his body slid into the net.

“I'll say they made the right decision but I ... didn't see it,” said Tanguay who is looking to surpass 50 points for the first time since he last played for the Flames in 2006-07.

“It's always a tough call to make but for us it's the right one tonight.”

Luongo didn't know he'd been scored upon.

“I didn't even see them take the puck out of my pads, so I don't know,” said the netminder who has not lost in regulation time in 15 consecutive games, going 10-0-5 over that span.

Brendan Morrison, Curtis Glencross and Tim Jackman scored for the Flames in regulation time. Alex Edler, with two goals, and Ryan Kesler replied for the Canucks.

It was the second win in as many nights for the Flames, who are seeking to challenge for a Western Conference playoff berth.

Calgary improved to 22-21-6 with their fourth win in six games while the conference-leading Canucks dropped to 29-10-9.

Vancouver picked up a single point for the third consecutive game to move three ahead of second-place Detroit.

Calgary's wins came after a 6-0 home loss to Minnesota and Morrison, who signed with the Flames after he couldn't crack the Vancouver roster at training camp, said they came at the right time.

“We've been battling at .500 off and on for four or five weeks,” said Morrison who erased a 1-0 Vancouver lead with a power-play goal .

“We keep talking about making a move up in the standings and if we want to do it we've got to beat good teams and we did that tonight.”

Morrison said he feels Calgary is poised to move up the closely packed West standings and into a playoff position.

“A lot of people still don't believe we can do it but the guys in the room aren't going to give up until the numbers actually say we can't get in [the playoffs].”

Calgary goalie Miikka Kiprusoff, who had surrendered 10 goals on 57 shots in two previous losses to the Canucks, gave up another on Vancouver's first shot.

Then he found his game as the Canucks peppered him with 44 shots.

“It's a big challenge, pretty good team here and they have some offensive talents but I felt pretty good and just tried to do my job,” he said after being beaten by Edler's long shot.

The Canuck defenceman's second goal was his eighth of the season and fourth in five games.

Both goalies had anxious moments in overtime as the two teams had power-play time. Kiprusoff was especially sharp with his glove.

“I felt he would come in and be rock solid and he was,” said Flames coach Brent Sutter.

“He made some big saves, especially early. The puck was hitting him in the logo and he was very under control in his game.”

Kesler, who tied a career high when he scored his 26th goal of the season when his shot hit Tanguay's stick on a short-handed rush, said the Canucks haven't pushed the panic button.

“We're getting points,” Kesler said. “We had a power play to win it in overtime and that just didn't happen.

“You're going to have cycles like this and the main thing is we got the point.”

He said the Canucks will have to work more on shootouts and rekindle the power play that sparked a 17-1-2 run from Nov. 24 to Jan. 8.

“We took the momentum [after the tying goal], generated a lot in the third and had a lot of good opportunities in overtime.” said Kesler who missed the net in the shootout.

“The power play has to get the job done and it didn't. It's a shootout loss — something for the fans. Obviously we're not very good at it right now and it's something to work on.”

Notes: Canuck defenceman Kevin Bieksa left the game with a swollen eye after a brief first-period scrap with Tom Kostopoulos and did not return. The Flames winger returned to the lineup after serving a six-game suspension for the hit that broke the jaw of Detroit's Brad Stuart ... Sergei Shirokov, benched in the third period of Thursday's 2-1 shootout loss to San Jose, was a healthy scratch from the Canucks' lineup ... he scored his first NHL goal in his season debut Tuesday, a 4-3 overtime loss to Colorado ... The grittier Aaron Volpatti returned to the lineup instead.

Forsberg practises with Avalanche

Avalanche coach Joe Sacco proclaimed after practice that Peter would play against St. Louis.

Not Forsberg, the former NHL MVP who's contemplating a comeback.

But Budaj, the backup goalie.

A clever, though unintentional, tease by Sacco, whose team hosts the Blues on Monday night.

As for possibly when — or even if — Forsberg might return to the NHL, that's still unknown. Forsberg went through his first practice with the Avalanche on Sunday in a tiny arena packed with people wearing No. 21 jerseys and waving Swedish flags.

And Sacco put the squad through a laborious workout after two straight lopsided losses. The Avs were on the ice for around 90 minutes, squeezing in some extra skating drills at the end that left Forsberg bent over and gasping for air.

Still want to return?

The 37-year-old Forsberg insists he does if his bothersome right foot can handle it, the one that's hampered him over the latter part of his career and caused him to consider retirement even though he felt like he could still play.

“It's good. Can't complain. It's been worse,” said Forsberg, who has yet to sign a contract with Colorado or been promised anything beyond a chance to measure his conditioning level against the team. “I'm not going to talk about it exactly, but it felt OK today.”

Forsberg came away impressed with the speed of his younger teammates, struggling at times to keep up. Wearing a white Avalanche jersey, Forsberg looked solid in a scoring drill against forward Daniel Winnik, even showing he hasn't lost his offensive flair on a spin move that nearly beat Budaj in net.

After players headed into the dressing room, Forsberg remained on the ice to hone his game. He would've been out there longer had a Zamboni driver not honked a horn so he could prepare the ice for a youth game.

Only reluctantly did Forsberg call it a day.

“I'm excited to be out there and see how it goes,” Forsberg said. “Keep on practising now and hopefully get better and better and see where I'm at.”

Forsberg's return this time is much different from 2007-08, when he joined the Avs late in the year and finished with one goal and 13 assists in nine games. A nagging groin ailment hindered him back then.

“I feel better than I did — I can't say I played well then,” Forsberg said. “Most of the goals and stuff you could barely see me in the highlights, if you didn't see the extended version. I have to be better than I was back then.”

He's not leaning toward a direction after just one practice. He will take his time, assess his conditioning and skill level before deciding on a return.

But he's definitely ahead of where Sacco envisioned he would be.

“I thought he looked well. I thought he played well,” Sacco said. “He worked hard, considering the terms of the practice. It was a hard practice out there today. But I thought he looked like he had energy.”

At first, his teammates were in awe of him. Being such a young squad, many grew up idolizing the Swedish sensation. That includes 20-year-old Matt Duchene, who had pictures of Forsberg, Patrick Roy and Joe Sakic adorning the walls of his bedroom.

“It was definitely pretty amazing to get on the ice with him, get a chance to see up close what I watched as a kid,” Duchene said. “A buddy said to me, ‘This is 12-year-old Matt's dream.’ Pretty crazy — eight years later, getting to skate with him. I'm thrilled to get this opportunity.”

He's also taking advantage of the opportunity, frequently asking Forsberg questions.

“It would be cool if he gets in the lineup,” Duchene said. “He looked great. I don't think he's missed much of a beat.

“Obviously, he hasn't been in the NHL for a while, but for a guy like him, a player of that calibre, it's going to be pretty easy to get back into it.”

Forsberg had his most productive seasons with Colorado, winning two Stanley Cup titles and the league's MVP in 2003. He's still a fan favourite as they flocked to see him in action Sunday at the team's practice facility, filling every seat in the tiny venue and then standing along a stairway.

“I had to work harder on every drill,” Forsberg chuckled. “It's awesome to be back here and putting on an Avalanche jersey again. I'm going to be out there with the guys and hopefully I can stick.”

Sens move into rebuilding mode

It’s over.

The Ottawa Senators have taken a corporate decision to pull the plug on the 2010-2011 NHL season and move full force into a rebuilding program the likes of which the Edmonton Oilers are currently undertaking.

The decision was taken in the days before the team’s latest embarrassments on the ice: a 7-1 loss to the Montreal Canadiens Friday night and a 6-2 defeat by the Philadelphia Flyers the previous night.

Quietly, the franchise has solicited key members of its fan base and corporate support and subsequently concluded that disgruntled fans are eager for a shift in direction. They are sick of the losing.

A decision was made to have faith that the often-fickle Ottawa fan base will enthusiastically embrace a re-building program, even at the cost of this year’s faint hopes – and perhaps even at the cost of some of the team’s most beloved veteran players.

Owner Eugene Melnyk broke his silence on his team’s season from hell on Saturday when he told the Ottawa Sun that, “The time has come to make some of the most difficult decisions that any owner can make.”

Melnyk said he has a plan “in motion” but refused to elaborate.

The Globe and Mail, however, has learned certain aspects of the plan.

- General manager Bryan Murray will finish out the year in his position but will move on to a senior advisory role similar to that held by coaching legend Scotty Bowman with the Chicago Blackhawks. Murray, who stayed on this season at Melnyk’s request, is open to this change as friends say the results of this season have left him “sickened.”

- coach Cory Clouston will also play out the year, but is highly unlikely to stay on as head coach. The new GM will have full responsibility for naming the coach of his choice.

Murray’s immediate task will be the “selling off” of player assets heading into the Feb. 28 NHL trading deadline. If playoff-bound teams are interested in the likes of forward Alexei Kovalev or defenceman Sergei Gonchar, two unhappy and underperforming expensive veterans, deals could be forthcoming. It is even possible that longtime stalwarts such as captain Daniel Alfredsson and defenceman Chris Phillips could be moved it they agree to the deals.

The team is not planning any announcements, but rather to let actions speak for themselves.

The new general manager – tentative interviews have already taken place, with deeper interviews to come – would be in place for the June entry draft. At the moment, the presumption is that the team will finish low enough to qualify for the lottery that determines the first five picks. A top pick is considered a priority for the rebuilding process.

Over the summer, the new GM, with Murray acting as consultant, would be expected to re-calibrate the team by chasing prospects rather than expensive free agents, as has been the case in past summers. Re-signing veterans whose contracts are expiring is no longer a priority.

Nor is saving this season.

It is, as of this weekend, considered a lost cause – and the first step toward a necessary fix.

DeRozan continues upward trajectory

There is no point in saying DeMar DeRozan is the next ‘this’ or the next ‘that,’ any more than this Toronto Raptors season was meant to be judged at any point other than at its conclusion.

But let’s just say this: in a city whose hockey team has turned the phrase “first-round draft pick” into an expletive deleted (or, at least, expletive traded to Boston) the progress of DeRozan, last year’s first-round pick, is notable. That he has been able to refine his game – to do a better job of handling the ball in tight quarters, make nice wide runs down the wing and increasingly find his mid-range jumper – while becoming enough of a factor that he has separated himself statistically from the bulk of the sophomore pack, is all to the good.

DeRozan is for the Raptors in many ways what Luke Schenn is to the Maple Leafs: the guy you’d like to think will really be something when the team can make it count.

What does it say that DeRozan’s sophomore season compares favourably with numbers put up by other athletic wing players in recent seasons? Just that it appears all the positive character traits that his coach and general manager and teammates say he possesses – Raptors television analyst Jack Armstrong calls him a gym rat – are translating into improvement. It’s nice that DeRozan hits the practice court at night to work on his shooting with assistant Eric Hughes; better yet that it’s making a difference.

“DeMar should continue to improve almost by default based on his extensive on-court experience,” said Raptors general manager Bryan Colangelo, referring to DeRozan’s average of almost 33 minutes a game. “He is clearly getting more savvy about when and how to score.”

Of course DeRozan’s defence needs work. And there will still be nights such as Wednesday’s: a start in which he writes himself large all over the game – eight points in eight minutes, including a reverse jam and brazenly returning the favour of a Joe Johnson blow-by with one of his own on the ensuing possession – only to get lost after spending the first five minutes of the second quarter on the bench. Not much he could do about the phantom foul he was assessed on Jamal Crawford that sent the Atlanta Hawks player to the line for three: Crawford flops. He sold the play. Crawford is a big-time player and he put the Hawks on his back down the stretch.

DeRozan nodded in the affirmative when it was suggested there will come a time where he will demand the ball in games such as Wednesday's, won 104-101 by Atlanta.

“Leandro [Barbosa] stepped up for us, though, so all I wanted to do was focus on defence,” DeRozan said. “Yeah, that time will come. But right now, a game like this one, I'm just trying to play to the flow of the game and do what I can.”

When these teams last met in Toronto, the Raptors were booed off the court. That was hardly fair, since even when the Raptors are healthy the Hawks are a nightmare for them – just as they are for many other teams. That was Nov. 28 and the Raptors were just beginning to come to grips with the fact they wouldn’t have Reggie Evans’s demonic rebounding and were torched with a 3-for-17 third quarter in which the Hawks outscored the Raptors 25-11 on the way to a 96-78 win.

That did not happen Wednesday. With sixth-man Barbosa scoring 26 points – he looks and sometimes walks like an old soul, but my goodness he can bring a crowd to its feet – the Raptors had an Andrea Bargnani three-pointer for the tie. He missed.

DeRozan’s line was modest: nine points, five boards and two assists. In time, there is no way his head coach will do what Jay Triano did: no way he’ll play 12 good minutes and then sit on the bench for five. There will be nights when it will be on him to deliver, when it will make sense to look at the standings before a game – when DeRozan will come back into a game and assert his will. Of that, we can now be reasonably certain.

Storylines unfold as NBA gears up for second half

As the NBA season hits its midway point, the San Antonio Spurs, Boston Celtics, Miami Heat and Los Angeles Lakers have established themselves as championship contenders, each having won more than 70 per cent of their games.

But anyone who watched rookie phenom Blake Griffin and his woebegone Los Angeles Clippers slay the Lakers last Sunday knows nothing’s decided just yet.

Here are some stories worth watching as the second half gets under way:

1. Trades: One for the dreamers, and another that needs to go away

The NBA trade deadline is fast approaching (Feb. 24), accompanied by the usual glut of rumours. The dominant ones so far have fixated on the never-ending drama surrounding Carmelo Anthony’s desire to play somewhere in New York State. Bottom line: ’Melo is unlikely to be with the Denver Nuggets much longer.

On the flip side is Steve Nash: the guy everyone except Phoenix Suns fans wishes would wind up on a team with championship potential but probably won’t.

NBA commentator Chris Webber recently tapped into that sentiment with his on-air chant: “Free Steve Nash.”

With the Suns drifting further behind in the Western Conference standings, the desert is no place for the 36-year-old Victoria native to play out the final chapter of his award-wining career.

Nash joining the New York Knicks is a fun fantasy, since he’d join his old head coach, Mike D’Antoni, and scoring partner Amar’e Stoudemire. But with 26-year-old Raymond Felton emerging as point guard to be reckoned with, it’s increasingly unlikely the Knicks would bench him for a star entering the twilight of his career. Suns general manager Lon Babby has also indicated the door is pretty much closed on this rumour.

2. Stampeding Spurs

After a preseason fixated on the three kings of Miami – LeBron James, Dwyane Wade, Chris Bosh – it’s deliciously ironic that the surprise championship front-runner at the halfway mark is a team that proves that importance of the collective outweighs the dominance of the chosen ones.

The Spurs are on track for a 70-win season, even though their biggest star – Tim Duncan – is averaging a career-low 13.7 points per game. Instead, the team has five players averaging double digits in scoring, but no one averaging more than 19 points. No glitz, no glam, just a veteran squad getting down to basics.

3. Raptors roller coaster

Bosh was gone, but early in the 2010-11 season, the Toronto Raptors looked like a group of fighters capable of slaying giants (think the Celtics, Oklahoma City Thunder and Orlando Magic), not to mention a fun young team to watch. Then, their top rebounder, Reggie Evans, broke his foot in late November, followed by a cartload of other injuries that have sent the squad careening off-course.

Nevertheless, the slumping Raptors (13-28) are still in the Eastern Conference playoff race. There are other reasons to hope: Andrea Bargnani is averaging a career-high 21.7 points per game, while the recent breakthroughs for sophomore shooting guard DeMar DeRozan suggests the team might just have a steady tandem threat on offense. Meanwhile, GM Bryan Colangelo has some chips he may cash in before the trade deadline.

4. Banged-up stars

A slew of serious injuries to key players have proven problematic for strong teams: From the Chicago Bulls (Joakim Noah) to the Portland Trail Blazers (Greg Oden and Brandon Roy) to the Dallas Mavericks (Dirk Nowitzki, whose recent nine-game absence threw the Mavs into a tailspin). But what of the Celtics? It’s only halfway through the season and Kevin Garnett, Rajon Rondo, Shaquille O'Neal and Jermaine O'Neal have all suffered at least one injury that has kept them out for a significant chunk of time. The team remains the toast of the Eastern Conference and has proven they can win without key parts, but the question remains be whether this vintage bunch can stay healthy enough come playoffs.

5. The anti-Spurs

After a disastrous start, James, Wade and Bosh have found a way to capitalize on each other’s formidable talents and gel as a team. So far, however, the Heat have been unable to beat the venerable Celtics – and the playoffs will put new strain on fragile new bonds.

The NBA honchos would love to see a showdown between individual gladiators – James versus Kobe Bryant (Lakers) comes to mind – but will the Heat’s individual talents hold up under the pressure of a drawn-out playoff run?

Stay tuned.

Carmelo Anthony: A model superstar break-up

This week may provide some resolution to the question that has been hanging over the NBA since the season started: What next for Carmelo Anthony.

The gifted scorer – the most lethal bucket-getter in the league, for my money – in the last year of his contract and facing the possibility of an NBA lockout and a more restrictive wage environment, wants to sign a $65-million contract extension now, before the current collective bargaining agreement goes up in smoke.

The problem is who to sign the contract with?

He’s enjoyed great success in Denver – seven straight playoff appearances, a western conference finals showing, three straight 50-win seasons – but has worked for three different management teams and an owner that has consistently signaled that cost-savings is part of the plan (the Nuggets trading Marcus Camby to Los Angeles Clippers befoe the 2009-10 season, comes to mind) which makes it hard to add to an already expensive, veteran team

And can he get his way without going all LeBron or Bosh? That is, piss off the people who have paid his rent for his entire career?

Incredibly, the class of 2003 is heading into their ninth NBA season. Peers and Team USA teammates Bosh, LeBron and Dwayne Wade seem to have figured out a promising NBA middle-age for themselves; and now Anthony wants the same thing.

He requested a trade before the season started, and stated his preference to play for the New York Knicks. In the meantime Denver has been working hard to maximize value for their franchise player and it's the New Jersey Nets – eventually the Brooklyn Nets – that can put together the best trade package for Denver (and the biggest – with as many as 14 players potentially involved, an NBA record if it happens).

Meanwhile reports are that Anthony the player is in the middle of a tug-of-war between several powerful and potentially conflicting interests.

And all this is going on while Anthony still has to go to work.

What’s amanzing, from afar, is that Anthony has been able to walk this tight rope without really alienating anyone.

He heard it from the crowd the Pepsi Center recently when he played poorly in a loss to New Orleans – the first time this season he’s been a target at home, despite months of trade speculation – but turned that around with a hustling, 28 points and 10 rebound effort in a win over the Suns the next chance.

For his part Anthony appears to have learned from the missteps of his peers.

Unlike Bosh, he appears to have been upfront with his current team, or as Anthony put it: "I'm not Chris Bosh." And he says he watched what happened with LeBron and won't be going there, either, telling Sports Illustrated's Ian Thomsen: "I would never go about it the way LeBron did it...If he could do it all over again, he wouldn't do it that way -- he would do it a totally different way, I can guarantee you that,"

Could it be that fans – fickle as they can be – realize they have no reason to boo their franchise player, even if he’s not long for the job any more?

Chris Bosh will get roasted when he returns to Toronto on Feb. 16th; he dissipated much if not all of the good will he built up in his seven years here when he began surveying fans via Twitter; and burned the rest of it when he complained about his cable.

Vince Carter? His quit job to force his trade to New Jersey will never be forgiven and has been a lasting stain on his career.

LeBron? There may be a few otherwise reasonable people who think he owed it to Cleveland to spend his entire career there, but not that many. But surely there is no one who thinks The Decision – torching his home state via his own television special – was the right way to go about leaving. He needs security when he returns to Cleveland now.

Anthony was drafted to play in Denver and signed a contract extension with them the first time he had the chance. He’s continued to play well for the Nuggets since it became clear he wasn’t going to sign another deal with them.

He needs to be proactive to secure the best opportunity for himself and what’s left of what are all too short a career; after all, it’s not like NBA commissioner David Stern is looking out for Anthony’s interests when he makes noises about cutting $800-million from the NBA wage bill.

People understand that; even if they don’t like it. Anthony has to do what he has to do.

In the meantime, play hard; play well; don’t pretend nothing is going on, but don’t rub it in everyone’s faces either.

Do all those things and chances are you’ll get the contract you want in the city you prefer, and you won’t have to use a police escort to return to your old place of work.