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Senator asks SEC why it didn't investigate Bear Stearns

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Bloomberg News / April 3, 2008

WASHINGTON - US Senator Charles Grassley, the senior Republican on the Senate Finance Committee, asked the Securities and Exchange Commission why it declined to bring a case against Bear Stearns Cos. on how the securities firm valued mortgage-related investments.

"Given the later collapse and federally backed bailout of Bear Stearns, Congress needs to understand more about this case and why the SEC ultimately sought no enforcement action," Grassley, of Iowa, said yesterday in a letter sent to David Kotz, the regulator's inspector general.

The SEC will investigate why no case was brought against Bear Stearns, Kotz said yesterday. "We'll do it . . . right away."

Bear Stearns agreed to sell itself to JPMorgan Chase & Co. for a fraction of its value last month, after nearly running out of cash. The Federal Reserve, in an emergency decision March 16, voted to authorize a loan against $29 billion of Bear Stearns assets, including mortgage-backed securities.

© Copyright 2008 Globe Newspaper Company.

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