Thompson told Reuters in a telephone interview that the drop in Bear Stearns’ share price resulted in a loss of about $10 million to the city’s public pension funds. The result of the investigation could spur a lawsuit.
After Bear Stearns agreed on Sunday to be bought by JPMorgan Chase at a price of $2 a share, its market value plummeted. On Friday Bear Stearns’ stock had closed at $30.85; on Tuesday the stock closed $5.91, Reuters said.
Investigations and the possibility of lawsuits have been popping up ever since. In addition to New York City, Reuters pointed out Massachusetts has also launched an investigation into whether to sue Bear Stearns to recover its losses.
Law firms Keller Rohrback LLP and Stember Feinstein Doyle & Payne, LLC have also announced investigations into investments for participants in Bear Stearns various retirement plans (See Bear’s Ills Draw Company Stock “Investigation”).