Bear Stearns ABS Hedge Fund
The Bear Stearns ABS Hedge Fund (“ABS Fund”) collapsed in 2007 not long after two other proprietary Bear Stearns hedge funds, the Bear Stearns High Grade Structured Credit Strategies hedge funds, blew up in the summer of 2007. The ABS Hedge Fund, like the High Grad Funds were managed by Bear Stearns Asset Management, Inc. The ABS Fund was sold to investors as a relatively safe and conservative fund which provided investors with stable income and low volatility by investing in a diversified fund of asset backed securities products. The Fund collapsed as the result of over-concentrated holdings of risky and speculative “Alt A” mortgage backed securities which were apparently purchased at inflated values and/or became illiquid during the recent mortgage and credit crisis.
The firm presently represents investors who lost approximately $20 million in the ABS Funds, and has initiated arbitration proceedings at FINRA to recover losses.