New York Attorney General Eliot Spitzer and the Securities and Exchange Commission each slapped a subpoena on Bear Stearns Co.in the latest chapter of their growing mutual fund probes, Reuters reports.
Earlier this month, Bear Stearns fired six employees for market timing in mutual funds. The company said it is cooperating with both Spitzers office and the SEC.
In addition to the subpoenas, the firm said the New York Stock Exchange has also requested information about its fund trading.
As if that is not enough, a class action lawsuit has been brought up against Bear Stearns and others for market timing. Essentially, the clients who were not permitted to time the market and thus make greater short-term profits filed the suit against the companies to try and get lost money back. Eighteen others were named as co-defendants alongside Bear Stearns. In the suit, Bear Stearns is also accused of late trading.