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Operational Nightmare in Reserve Primary Fund's Final Days

MFWire is following the Reserve Primary Fund’s trial by updating a living timeline and providing periodic updates on the court proceedings.  Most recently, MFWire summarized the testimony of the fund’s operations director and Bruce Bent II’s brother-in-law, David Gareis.  Gareis detailed the operational nightmare that occurred during the fund’s final days, including difficulties in getting the fund’s custodian, State Street, to wire money to redeeming shareholders.

“Soon enough it was a full-court-press of everybody at [Reserve Management Company] calling their State Street contacts to urge the custodian to release client money. Gareis said he ordered one of his subordinates to call every fifteen minutes.  In vain. By late afternoon, State Street had stopped sending redemptions entirely. After the wires had stopped, Gareis sent his brother-in-law an email reading, ‘Sorry I couldn't do more for you today. But tomorrow is a new day and I know that we'll get through this.’”

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