Barclay versus Bear Stearns: Suits begin work to apportion blame
Barclays PLC, the U.K.’s third- biggest bank, sued Bear Stearns Cos. over losses caused by the implosion earlier this year of a hedge fund that invested in subprime mortgages.
Barclays Bank PLC, a unit of London-based Barclays, claimed the New York-based securities firm hid negative financial information about the collapsed fund, according to a complaint filed today in Manhattan federal court. Barclays said it was the “sole participating shareholder” of the fund.
The collapse was “one of the most high-profile and shocking hedge fund failures in the last decade,” Barclays said in the complaint, which seeks unspecified damages.
The suit, which includes claims of fraud, conspiracy and breach of fiduciary duty, cites a February e-mail to Barclays in which Tannin allegedly said the fund is “having our best month ever” and that our “hedges are working beautifully.”
While this asset bubble is quite large and affects the world, there are deep pockets on the other side as well. There are individuals named as well as the ‘corporate person.’ Maybe a definition of responsibility (not blame) may result?