Bear Stearns 'was brought down by speculators'

6 May 2010

Two of Bear Stearns' chief executive officers have laid the blame for the collapse of the firm on speculators.

Speaking at the Financial Crisis Inquiry Commission, Jimmy Cayne – who left the company in January 2008 - said that the firm had come under attack from hedge funds and compared Bear Stearns at the time to "a big, fat goose … that's about to get eaten up alive".

A similar sentiment was echoed by his successor Alan Schwartz, who said: "I think there was activity that was motivated by [a] profit motive to start rumors."

The tactic of blaming hedge funds for the financial failures of Wall Street firms is not a new one - executives at both Lehman Brothers and Citigroup have made similar allegations in the past, reports the Financial Times.

Earlier this year, the commission took testimony from banking chiefs such as JPMorgan Chase's Jamie Dimon and Lloyd Blankfein of Goldman Sachs as it continues its investigation into the causes of the financial crisis.

By Gary Cooper

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