Bear Stearns has been warned it could face civil charges stemming from an SEC probe into its anti-competitive bidding for municipal bonds, the Wall Street Journal reports. The firm is also being investigated by the FTC for alleged violations of consumer protection laws involving its mortgage-servicing unit. Bear Stearns officials said the company is co-operating with both agencies and the Department of Justice.
Yesterday's filings also revealed Bear Stearns' profits plunged 79% the first quarter of 2008, though it still managed to generate a profit. The figures show how rapidly the Wall Street bank was overtaken by the liquidity crisis in March that sent its share price plummeting and prompted a takeover by JP Morgan.