barclays sues bear stearns over sub prime

Barclays sues Bear Stearns over sub-prime

Barclays sues US investment bank over dispute involving hedge fund

Written by Nicholas Neveling

Accountancy Age, 20 Dec 2007


The fall-out of the sub-prime crisis turned ugly for Barclays this week as it emerged that the UK bank was to sue US investment bank Bear Stearns.

According to the Guardian the case relates to the loss of hundreds of millions of pounds in a failed hedge fund.

The lawsuit, filed in New York, accuses Bear Stearns of deliberately concealing the fund's losses. The fund eventually sucked up $400m (£200m) of Barclays cash.

Barclays said the fund's failure was 'one of the most high-profile and shocking hedge fund failures in the last decade'. Barclays claims in the days before the fund had to be rescued, Bear Stearns executives covered up the slump in value.

Bear Stearns defended itself against the allegations.

Barclays has already taken a $1.7bn write-down on its sub-prime assets.

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