Brokerage firm Bear Stearns reported record results for 2005, and noted that it will likely pay US$250 million to settle market timing allegations.

Bear Stearns Companies Inc. reported net income for the fourth quarter of 2005 was a record US$407 million, up 15% from US$352.6 million for the fourth quarter of 2004. Net revenues for the 2005 fourth quarter were US$1.9 billion, up 3% from US$1.8 billion for the 2004 fourth quarter.

For the full fiscal year ended November 30, earnings per share were a record US$10.31, up 6% from fiscal 2004. Net income for the full year 2005 was US$1.5 billion, up 9% from the US$1.3 billion earned in 2004. Net revenues for 2005 were US$7.4 billion, an increase of 9% from US$6.8 billion in the prior fiscal year.

“Bear Stearns continues to grow and prosper as this year marks the fourth consecutive year of record profits. All of our business segments are broader and stronger than ever before,” said James Cayne, chairman and chief executive officer of Bear Stearns. “The ability to deliver products and services that meet the comprehensive needs of our clients has allowed us to distinguish ourselves in an increasingly competitive marketplace. These results reflect the dedication we have to serving our clients well and the passion we have for building the franchise.”

Bear Stearns has also announced that it has submitted an Offer of Settlement to the Securities and Exchange Commission and the New York Stock Exchange to resolve the previously disclosed investigations relating to mutual fund trading. The settlement offer, which was negotiated with the staffs of the SEC and NYSE and will be recommended by them, is subject to approval by the respective regulators. Terms include a payment of US$250 million and retention of independent consultants to review aspects of its mutual fund trading and global clearing operations. The company is fully reserved for this settlement.

Cayne added, “As one of the leading financial services providers, we take our responsibilities to our clients very seriously. We believe that seeking to resolve this issue is in the best interests of our shareholders, clients and employees.”