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Bear Stearns Investors Go To Court

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The collapse of Bear Stearns is going to keep teams of lawyers fully employed for years to come. It's not only the criminal prosecutions brought by the Justice Department and civil charges brought by regulators, Bear has mounting investor lawsuits to fend off. The latest comes in the form of a class action suit on behalf of shareholders seeking $2.5 billion in damages on the claim that Bear's board bungled the negotiations that ultimately led to JP Morgan Chase buying the bank with the backing of the Federal Reserve.
"The directors gave the bank to JPMorgan," said the plaintiffs lawyer. His clients include the Police and Fire Retirement System of the City of Detroit, which owned shares of Bear Stearns when the firm collapsed.
A lawyer representing British investor Joseph Lewis, who bought a 8.4 percent stake in Bear Stearns a few months before the firm fell apart, said at a hearing in federal court that his client was still mulling whether to join the proposed class of injured investors.
Lawyers for JPMorgan and Bear Stearns defended the actions of Bear's board, saying the only alternative was bankruptcy.

Former Bear investors press damages claim in court