Bear Broker Lured Billionaire's Investment: Sources

One of the big questions on Wall Street centers on the person responsible for enticing billioniare investor Joseph Lewis to take a 7% stake in Bear Stearns.

It wasn't Bear Stearns CEO Jimmy Cayne, who was rumored to have grown close to Lewis over a shared interest in the card game Bridge, sources tell CNBC. Instead, it was a broker at the firm named Kurt Butenhoff who has close ties with the reclusive billionaire.

Butenhoff has been with Bear since 1995 and has handled accounts for Lewis for years, people at Bear tell CNBC. The two are so close that they have some business ties, according to documents.

Butenhoff, according to one press release, was cited as "spokesperson for Mr. Lewis" regarding Lewis' investment in a company called Bear was an investor as well, the press release said.

People close to Bear Stearns say it was Butenhoff, not Cayne, who enticed Lewis to snap up shares of Bear and become its largest shareholder, even surpassing the stake held by Cayne himself.

Lewis, who became a billionaire trading currencies, snapped up about $860 million worth of the investment bank's stock over the past two months. Lewis disclosed the stake Monday in a filing with the Securities and Exchange Commission.

Bear has been hit hard by the fallout over subprime loans, and the implosion of two of its hedge funds. But Butenhoff's pitch to Lewis, these people say, was simple: For all its problems, Bear is an undervalued property and its shares will eventually rebound.

It's unclear if Lewis purchased shares because he bought Butenhoff's sales pitch or was betting, like a lot of people on Wall Street, that Bear is a takeover candidate and its shares will rise if Cayne decides to sell the firm.

Neither, Butenhoff nor Cayne returned calls for comment. But people inside Bear says Butenhoff is a close associate of Cayne, considered to be in his inner circle because of his prowess in snaring accounts of mega-rich people like Lewis.

When one official at Bear heard rumors that Lewis and Cayne have grown close over a shared interested in Bridge (Cayne is a championship Bridge player) he just laughed.

"(Lewis) doesn't even play Bridge," this person said.