Irate investors ponder Bear suits

As Bear Stearns bails out its sinking hedge fund, another threat looms: lawsuits from angry investors, Reuters said. Investors in the fund have already been talking to their lawyers about the possibility of suing Bear Stearns. The likely focus in these cases would be whether investors were fully informed of the risks, lawyers told Reuters. A Bear Stearns spokesman would not comment on whether the bank knew of any impending suits from the funds’ failures. However, it would be difficult for such sophisticated investors, such as wealthy individuals and large institutions, to argue that they did not understand what they were getting into or that the disclosures were inadequate, a lawyer said to Reuters. The firm is actively trying to save its High-Grade Structured Credit Strategies Fund, financing it with $1.6 billion, a lawyer said. The other failing fund, the High-Grade Structured Credit Strategies Enhanced Leverage Fund, won’t get any financing help.