Three months before the stock price of Bear Stearns plunged below $3, general counsel Michael Solender unloaded 2,087 stock options at $89 per share, writes The American Lawyer.
The sale meant Solender pocketed $186,000 (£93,840) on 21 December, 2007, according to a form filed with the Securities & Exchange Commission (SEC).
Solender still holds options for 17,500 shares, which do not appear to have been exercisable under terms of the company's deferred compensation plan. Those shares would have been worth more than $1.5m (£760,000) in December; as of today (26 March), they are worth only $170,000 (£85,760) unless the stock continues rising.
Bear Stearns promoted Solender to general counsel from managing legal director in 2004. He earned his stock options as part of the company's deferred compensation plan for executives. Solender was a partner at the Washington DC-based law firm of Arnold & Porter and general counsel to the Consumer Product Safety Commission before joining Bear Stearns in 2002.
Solender wasn't the only one to cash in shares last December: Five other Bear Stearns insiders also exercised their stock options, with director Paul Novelly selling the most. Novelly collected more than $4.34m (£2.19m) for his 50,000 shares, according to SEC documents.
A call for comment placed to Solender's office was not immediately returned.
Meanwhile, it has emerged that elite New York firm Simpson Thacher & Bartlett advised the Federal Reserve Bank of New York on the Bear Stearns sale to JP Morgan Chase. Manhattan rival Wachtell Lipton Rosen & Katz advised JP Morgan on the deal, despite the investment bank's close links with Simpson Thacher.
Simpson Thacher declined to comment, while the New York Fed could not be reached for comment.
The American Lawyer is a US sister title of Legal Week.
