| Page 3 of 3 < |
Fed Comes To Rescue As Wall St. Giant Slips
|
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
Federal securities regulators and the U.S. attorney in Brooklyn are investigating what Bear executives told investors about the health of its hedge funds in a pivotal April 25 conference call. Investigators are also looking at the transfer of personal funds by two Bear managers into safer investments about the same time. The executives have, through their attorneys, denied wrongdoing, and Bear Stearns has said it is cooperating.
William F. Glavin, the secretary of the Commonwealth of Massachusetts, sued Bear late last year over alleged conflicts of interest that he says allowed the company to dump risky financial instruments into the accounts of unsuspecting investors. That case has not been resolved.
Meanwhile, Barclays Bank, the British financial institution, has sued Bear and some former employees, accusing them of hiding dire financial problems and soliciting new funds from business partners in an effort to make Bear's failing hedge funds appear healthier than they were.
Over the years, Bear has often gone its own way, breaking with the rest of the Wall Street club. In 1998, the New York Fed cajoled all the large Wall Street firms into buying up assets of the failed hedge fund Long-Term Capital Management to avert a global financial meltdown.
All the large firms, that is, except one, which refused to participate: Bear Stearns.
Tse reported from New York. Staff writers Jeffrey H. Birnbaum, David Cho, Carrie Johnson and Alejandro Lazo and researcher Richard Drezen contributed to this report.
