Investors Challenge Bear Over Defunct Fund

Law360, New York (June 4, 2008, 12:00 AM EDT) -- Bear Stearns Cos. is facing new claims by investors who, echoing federal regulators, say Bear misled the public about the soundness of a hedge fund that collapsed last summer in the subprime mortgage meltdown.

Several former investors in the Bear Stearns High-Grade Structured Credit Strategies Fund have lodged arbitration claims with the Financial Industry Regulatory Association against two Bear subsidiaries and the fund's two portfolio managers, Maddox Hargett & Caruso PC, one of the four firms representing these claimants, announced Wednesday.

"Our investigation indicates that officials...
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