Cayne

Did false market rumors lead to Bear Stearns' demise?

Thu, 20 Mar 2008 07:59:58 -0400

Ah, rumors. We've noted their power on Wall Street. Now some are wondering whether those rumors about Bear Stearns were maliciously spread by people who took a long position on the firm. Now that's some conspiracy theory. But what if it were true? The SEC is looking into it. If you bet on the Bear's collapse and won big, you'll likely be getting a call. In general, there is an understandable concern that rumors, especially in a tinderbox environment, can really do a number. But these short tricks have been around for years. Can anyone really do anything?

For more:
- here's an item in the LA Times

Related Articles:
Also Noted: Rumors about Bear Stearns' liquidity heat up. Read
Bear Stearns rumors intensify. Article
Bear Stearns small capital base, Cayne's golf game. Article

Did Bear Stearns executives lie?

Thu, 20 Mar 2008 07:59:57 -0400

Bear Stearns just can't win. The humiliation of the Fed-backed, JP Morgan Chase bailout was rank enough. Now comes word from Financial News Online that the SEC is taking a look at statements by executive committee chairman Ace Greenberg and CEO Alan Schwartz before the deal that said, outright, that the bank had no liquidity problems. No one really believed them, obviously, but did they lie? People have speculated. It will be interesting to see what comes of this. The irony is that JP Morgan Chase will be liable for all the damage.

For more:
- here's the Financial News Online article
- Schwartz likened to Skilling. Article

Related Articles:
Bear Stearns: A timeline of decline. Timeline
Can Bear Stearns be salvaged? Article
The future of Bear Stearns. Editor's Corner
Cayne joins rogues list. Article