Barclays has launched a $400m-plus legal action against Bear Stearns, accusing its Wall Street rival of fraud over the collapse of two hedge funds earlier this year, The Independent reports.
The collapse of the funds in June was the first sign of the seriousness of the mortgage market crisis, but Barclays alleges that Bear Stearns was misrepresenting the health of its hedge fund business for more than nine months leading up to the disaster. Barclays' possible losses on the funds, to which it advanced a string of multimillion-dollar loans, could amount to between $300m and $400m, and the company demanded compensation and damages in a lawsuit filed with a New York court last night. MORGAN STANLEY YESTERDAY became the latest bank to announce a bailout from a foreign governmen...
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