Investors Plan to File Suit Over Bear Stearns Hedge Fund Losses
The first lawsuit, seeking class action status, will be filed on Monday on behalf of investors who took big losses in the two Bear Stearns subprime hedge funds that recently imploded.
A major class action law firm, Bernstein Litowitz Berger & Grossmann, is working over the weekend to draft the lawsuit and sources say the firm expects to file it as soon as Monday.
The lawsuit according to sources will allege three main allegations.
1. Bear Stearns made misstatements in the funds offering documents.
2. Bear Stearns misrepresented the funds exposure to risk
3. Bear Stearns misrepresented its ability to control the risk.
Bear Stearns could not be reached for comment.
In one of Bernstein Litowitz Berger & Grossmann's biggest cases, it won a 6 billon dollar judgment against Wall Street on behalf investors in WorldComm stock.
Meanwhile, Barclays may have had big losses in one of the funds, The Wall Street Journal reported on Saturday.
The London-based bank invested some $400 million in Bear Stearns Asset Management's High-Grade Structured Credit Strategies Enhanced Leveraged Fund, the newspaper said, quoting people familiar with the matter.