Funds Find One Bet They Can't Hedge: Trust

Wagering the securities firm stock would fall paid off millions

(NEWSER) - The epic collapse of Bear Stearns didn't mean bad news for everyone on Wall Street—several big hedge funds made a mint off it, the Wall Street Journal reports. The funds essentially placed bets that Bear would stumble, then raked in millions when the security firm's shares took a nosedive. The SEC is investigating to make sure profiteers did not have insider knowledge of the coming collapse. More»

(NEWSER) - Wall Street is dizzy after mixed signals threw traders into buy mode despite an abundance of bearish indicators today, making for one of the most volatile days in weeks. The Dow finished up 150.38 points at 13362.37, even after Asian markets plummeted across the board last night, a buyout for Bauch & Lomb failed, and a troubled Bear Stearns put another subprime-backed hedge fund on hold. More»

Cox announces investigations into CDOs in wake of Bear Sterns tremors

(NEWSER) - The feds are investigating the controversial bundles of financial services that have recently shaken the market and sparked a spate of leveraged buyouts, the Journal reports. SEC chief Christopher Cox told a congressional panel yesterday that "about 12 investigations" were under way into CDOs, shared debt packages reliant on faltering subprime mortgages. More»

Bear Sterns execs accused of fraud go free

(AP) - Two Bear Stearns executives who ran hedge funds that collapsed after betting heavily on the shaky subprime mortgage market were acquitted today of lying to investors—a defeat in the government's bid to punish fraud exposed by the financial crisis. The closely watched case was the first one against Wall Street executives related to the meltdown and doesn't bode well for future prosecutions. More»

Steady returns, tiny auditors prompted questions

(NEWSER) - Bernard Madoff's investment operation—found this week to be a massive Ponzi scheme that lost as much as $50 billion—raised plenty of red flags over the last decade, the Wall Street Journal reports. As far back as 1999, Madoff’s steady returns in wide-ranging markets seemed unrealistic to some observers, and at least one tried to blow the whistle. “Madoff Securities is the world's largest Ponzi Scheme,” a rival wrote to the SEC that year. More»