11 New Hedge Fund Claims Lodged Against Bear Stearns

Claims by 11 additional investors who lost a combined $62 billion have been filed with the Financial Industry Regulatory Authority against Bear Stearns over the $1.6 billion collapse of two hedge funds it managed, Reuters reports.

One of the claims includes a fund-of-hedge fund manager in the Cayman Islands who lost $1 million in the Bear Stearns High Grade Structured Credit Strategies Enhanced Leverage (Overseas) Fund. An attorney with one of the four law firms representing this investor, Steve Caruso, of Maddox, Hargett & Caruso, said, “Officials at Bear Stearns engaged in a concerted effort to conceal the true state of affairs at both of these hedge funds for an extended period of time before they imploded.” Another attorney said that Bear Stearns used the funds as a “dumping ground” for poor investments.

Three weeks ago, Massachusetts Secretary of the Commonwealth William Galvin charged Bear Stearns with making trades in the funds without getting the required approval of independent directors.