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.<\/p>\n
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.<\/p>\n
The news was first reported by the Wall Street Journal.<\/p>\n
Bear Stearns was not immediately available for comment and U.S. prosecutors declined to comment.<\/p>\n
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.<\/p>\n
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.<\/p>\n
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.<\/p>\n