Shares in the troubled investment bank plummeted to US$2 following its agreement to be bought out by JPMorgan Chase.
However, this increased to US$5.91 in a matter of hours amid speculation that other parties were interested in buying out Bear Stearns. On Tuesday share prices reached US$8.50.
William Thompson, New York City Controller, said that the plunge in the share price had cost the public pension fund approximately US$10 million.
"I think a lot of people are going to be taking a look. Was there some deception in there or was this just a miscalculation?" Mr Thompson said.
The city's public finances partly rely on employees who work in the financial industry and whose jobs may now be at risk. They add significantly to tax revenue because they often earn up to US$200,000 per year.
The New York housing market and tourism remains strong said Mr Thompson.