Reuters- U.S. prosecutors launched a criminal investigation into two mortgage-related hedge funds at Bear Stearns that collapsed during the summer, a person familiar with the investigation said onFriday.
The U.S. attorney in Brooklyn, New York and the U.S. Federal Bureau of Investigation have begun the probe, which is in the early stages, said the source who requested anonymity.
The news was first reported by the Wall Street Journal.
Bear Stearns was not immediately available for comment and U.S. prosecutors declined to comment.
The U.S. investment bank has been battered by the collapsed hedge funds and losses in its flagship mortgage business which led to the departure of its co-president Warren Spector.
Bear Stearns chief executive on Thursday said the brokerage would consider selling a stake in itself if a deal with a partner would create value but denied the bank needed a cash infusion.
Bear Stearns shares have lost more than a fifth of their value since the start of the year and the investment bank is being sued by a limited partner in one of the failed hedge funds.
