Skip to main content

Bear Stearns: Insider Trader Allegations and Another Fund Liquidating

  • Author:
  • Updated:

Each day without the name Bear Stearns in the headline must be a relief for Jimmy Cayne. And today Jimmy might need to blaze up a bit more than usual because Bear is back in the headlines.
The worst year ever for the once mighty trading house just got a bit worse. Business Week has uncovered a probe by the Securities & Exchange Commission and the US Attorney’s office in Brooklyn into allegations that Bear Stearns insiders pulled their own money out of Bear Stearns funds while the funds managers were urging investors to hold fast and weather the storm.
And as if that weren’t enough, the collapse of the High Grade Structured Credit Strategies and High Grade Structured Credit Strategies Enhanced Leverage funds are still sending shockwaves through Bear Stearns.
“In recent weeks, BSAM has begun notifying investors in the Bear Stearns Multi-Strategy Fund that it plans to liquidate that $100 million investment vehicle. The fund, which only invested in Bear-managed hedge funds, put several million dollars in the Cioffi-led funds,” Business Week reports.
Probe of Insider Trading at Bear Stearns [Business Week]