Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Thursday, June 7, 2007

Hedge Funds Say Bear Stearns Manipulated Subprime Loans Market

Did Bear Stearns act improperly in buying up weak subprime loans to prop up the sinking market for securities backed by subprime loans?  Some hedge funds that were betting against the market through their purchase of credit default swaps (CDS) think so and also complain about Bear's proposal to the International Swaps & Derivatives Association to change its rules expressly to permit this practice.  See WSJ, The Sure Bet Turns Bad.

http://lawprofessors.typepad.com/securities/2007/06/hedge_funds_say.html

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