Bear Stearns Hedge Funds Losses
Investors who Lost Money in Bear Stearns Hedge Funds May Be Entitled to Financial Compensation
Two Bear Stearns hedge funds that were tied to the nation’s risky sub-prime mortgage industry have dropped 30% of their value in the past year, costing investors billions of dollars. The two funds – the High Grade Structured Credit Strategies Fund and the High Grade Structured Credit Strategies Enhanced Leverage Fund – are down an estimated $1.9 billion.
The mishandling of the funds has led to federal criminal charges being filed against two former Bear Stearns financial managers. The men, Ralph R. Cioffi, 52, and Matthew Tannin, 46, were indicted in June 2008 on charges they lied to investors in the funds and misrepresented the dismal financial standing of the securities. As the under-performing funds posted record losses and slipped into bankruptcy in 2007, Cioffi and Tannin conspired to hide the dire situation from investors, prosecutors allege. In the end, investors in the two funds lost everything.
Bear Stearns – which is now part of financial giant JP Morgan – managed the High Grade Structured Credit Strategies Fund and its sister offering, the High Grade Structured Credit Strategies Enhanced Leverage Fund. Both funds were high-risk funds that bet heavily on unstable, sub-prime loans mostly given to borrowers with bad credit. Both investments were designed to capitalize on the nation’s housing and mortgage boom, which began in 2000 and started to unravel in the summer of 2007.
The High Grade Structured Credit Strategies Enhanced Leverage Fund was the more aggressive of the troubled Bear Stearns funds. Launched in 2006, the fund relied on sub-prime securities. As the nation’s sub-prime market collapsed, the Bear Stearns fund descended into financial ruins. Within a year, the fund was attracting bids for just 5 cents on the dollar.
The High Grade Structures Credit Strategies Fund was launched in 2003 and was profitable until early 2007. With the demise of the sub-prime mortgage industry, however, the fund was eventually selling for about 30 cents on the dollar.
Get Bear Stearns Hedge Fund Legal Advice
If you or someone you know invested and lost with Bear Stearns hedge funds, you may have legal rights to recover your losses. The aggressive, experienced attorneys at Mark & Associates, P.C. will aggressively represent you and seek the best possible legal outcome in your case. Please contact Mark & Associates, P.C. today for a free consultation about your potential case. Call 1-866-50-RIGHTS (1-866-507-4448) or fill out the form at the right.
Topic Quick Look
What are the risks?
Two funds managed by Bear Stearns – which is now part of JP Morgan -- are at the center of the emerging financial controversy. The High Grade Structured Credit Strategies Fund and its sister offering, the High Grade Structured Credit Strategies Enhanced Leverage Fund, were both high-risk funds that bet heavily on shaky, sub-prime loans and lost -- costing investors an estimated $1.9 billion dollars.
Was Bear Stearns acting in the shareholders best interest?