May 27, 2008
Bear Stearns Tried to Save Itself, Lawsuits Coming
It's Michigan vs. Massachusetts--and we're not talking about the NBA Eastern Conference Finals! Those states' pensions funds are hoping to lead a lawsuit against Bear Stearns over its fall. The Sun reports it's likely Michigan will be the lead state, since its $62 million in losses (pension fund participants were state employees like teachers, judges and cops) are bigger than Massachusetts' $21 million.
The centerpiece of Bear Stearns news is the first Wall Street Journal article of a three-part series on how the investment bank collapsed. Here's a money quote: "repeated warnings from experienced traders, including 59-year Bear Stearns veteran Alan "Ace" Greenberg, to unload mortgages went unheeded."
Dealbreaker has a handy guide to the article and outlines the four deals Bear Stearns failed to complete as it tried to keep itself afloat. Last week, JP Morgan, which bought Bear Stearns at a bargain basement price, announced 8,000 layoffs worldwide, on top of 4,000 previously announced layoffs.
Photograph of Bear Stearns mirrored by unlisted sightings on Flickr
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Shoulda listened to "Ace".
This is utter bullshit.
You can't sue based on the power and clarity of hindsight.
This is like those ambulance chasing law firms who say they'll help you recover money you lost in the stock market by suing your broker.
Can I sue Atlantic City now because I lost at roulette?
All this hopeless skullduggery over a measly $83 million? What, are Michigan and Massachusetts so strapped for cash that they'd rather go out flogging a dead horse than raising the sales tax on pork rinds and corn cobs by 1/10 cent? Fuck them, and that's not my inner Bear talking, it's my inner Merrill Goldman Morgan.
They can sue for negligence.
On a positive note, I sold my Bear Stearns coffee mug on Ebay for a pretty penny. So I got that going for me, which is nice.