Investors in valueless Bear Stearns funds mull lawsuits

19 July 2007

Investors in two funds managed by Bear Stearns are mulling legal action after the firms recorded such huge losses as to render them virtually valueless, it has been reported.

A letter from Bear Stearns sent to clients this week said that there was "effectively no value" left in the High-Grade Structured Credit Strategies Enhanced Leverage Fund and that the High Grade Structured Credit Strategies Fund had "very little value" remaining.

However, according to a recent report, a lawyer who specialises in lawsuits involving financial companies said that two investors had approached him with a view to mounting legal action to recover their investments.

The lawyer, Ross Intelisano, of Rich & Intelisano, told Reuters: "They [his clients] are shocked and angered by the losses. They were under the impression that at least for that fund [that they were invested in] that the losses were much milder."

Mr Intelisano added that the clients were a family office and a fund of funds but did not provide any further information as to their identities.

The article also stated that another lawyer Jacob Zamansky of Zamansky & Associates had been approached by the funds' aggrieved investors.

The funds' losses came after both bet heavily on risky sub-prime home loans.

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