Senator Wants to Know How Bear Insiders Will Fare
The Senate Finance Committee's top Republican, Chuck Grassley, said Thursday he has ordered his staff to inquire about how Bear Stearns insiders are being treated under the deal with JPMorgan Chase.
The Iowa Republican said in a statement that he wants to know "whether they'll come out better than if Bear Stearns had gone into bankruptcy."
Grassley said he is interested in details of the Federal Reserve's agreement to lend $30 billion to help Bear Stearns and about the actions of the company executives.
With support from the Fed and Treasury Department, Bear Stearns agreed Sunday to be sold to JPMorgan for $2.49 a share at current prices. As part of the deal, the Fed agreed to guarantee up to $30 billion of Bear's hard-to-value assets.
"I've instructed my staff to delve into the details of the deal," Grassley said.
He said he wants to know how the Fed action compares with previous actions by the Fed and Treasury to intervene in financial problems, such as how the Clinton administration tackled the Mexican bond crisis and then made money.
A long-time interest of his is how insiders are treated in merger and acquisition transactions and said corporate "bigwigs" should not be able to profit while employees, shareholders and creditors have to carry the burden.
Grassley said he was not trying to suggest bankruptcy would have been a better alternative for Bear Stearns.
"The top executives shouldn't be treated better than anyone else when a company goes under," he said.