Corporate & Securities Law

DID ACE GREENBERG SELL OUT BEAR STEARNS' SHAREHOLDERS?

By Brett D. Sherman

ACE GREENBERG, CHAIR OF THE BEAR STEARNS RISK COMMITTEE, HAD ALMOST NOTHING TO LOSE WHEN THE BEAR STEARNS EXPRESS CRASHED INTO THE SUBPRIME CRISIS.  

Alan C. Greenberg, former Bear Steans CEO, dumped almost all off his Bear Stearns stock at high prices during the housing bubble, leaving the 80 year old with little incentive to play the tough guy as head of Bear's risk committee.

Ace Greenberg sold nearly all of his stock, pocketing tens of millions before the clock approched midnight for Bear Stearns.  He owned about 15,000 shares when Bear collapsed.    

The Wall Street Law Blog has some questions...

Did Alan Greenberg - purported master of risk management - see the writing on the wall for the company for which he had served as Senior Partner, CEO & Chairman of the Board (among many other exalted postions)?  

What other reasons would motivate Ace to sell massive numbers of BSC shares when the stock price was high and Bear Stearns' future was - at least according to senior management - supposed to be bright?   

Did Ace Greenberg have a fiduciary duty to disclose to shareholders why he was selling as much stock as he could quarterly and, sometimes, more often?  

Did the fact that he was highly respected on Wall Street and revered at Bear Stearns earn Ace Greenberg a free pass?  

Is Alan Greenberg responsible for material omissions for failing to disclose information that could have saved shareholders from suffering huge losses?  

During Bear's final few years, how much did Ace really care about risk management?

Just asking...

Brett Sherman;  The Sherman Law Firm

Full post as published by Wall Street Law Blog on June 07, 2009 (boomark / email).