FLASHBACK: Bear Stearns Fat Cats Cashed Out at the Top
This story ran in August of '07. I ran into it again because I had linked to it in my Must Read post "The Simple Truth."
When I clicked on the link, lo and behold I found this detailed account of how Bear Sterns top executives cashed out before their house of cards came crashing.
Less than a year later, Bear Stearns went belly up and JPMorgan devoured its corpse.
Below is the first page of how the kingpins jumped ship before it sank. The second page was too slow to load.
Read it and get very very mad, America.
Seniors, soon to be retirees, and working folks everywhere - it's time to get out the pitchforks.
Americans need to draw the line....
Bear Stearns Fat Cats Cashed Out at the Top
08/08/07 - 09:50 AM EDT
BOSTON -- Wall Street bank Bear Stearns (BSC Quote - Cramer on BSC - Stock Picks) is right at the heart of the subprime mortgage meltdown. It's reeling from massive, multibillion-dollar losses at two hedge funds.
And every investor who has watched the stock collapse from more than $172 to just $117.78 in a few months is probably kicking himself for not selling at least some back at the peak, before the crisis hit.
Four savvy investors did just that.
Step forward, Alan Greenberg, Sam Molinaro, James Cayne and Warren Spector.
Who are they?
Top honchos at ... Bear Stearns. (Or they were: Spector has now left in a management shake-up. The others remain.)
Between them, the four quietly cashed out more than $57 million worth of company stock before the crisis hit.
The executives saved themselves nearly $16 million by their astutely timed sales, which were disclosed in a series of public filings.
Those losses got passed on to the unlucky outside investors who bought the stock.
Bear Stearns declined to comment.
These executives did nothing wrong. Many of the stock sales were made as share options came due at the end of 2006. Certain executives had made similar big trades in previous years. The trades were made several months before problems surfaced at the company's hedge funds in May.
Furthermore, Bear Stearns executives are still holding plenty of stock in the company.
Nonetheless, their timing last winter was notable for its good fortune, if nothing else. Once again it shows that company insiders seem to prove pretty good at knowing when their own stock is overvalued and when the future risks do not justify the price.
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read more... [warning: page is as slow as hell - that's why i copied and pasted first page - couldn't get to the second]
