Sec Filing Prompts More Questions About JPMorgan/Bear Stearns Deal

A recent SEC filing from JPMorgan Chase (JPM) raises more questions about the government's role in JPMorgan's pending acquisition of Bear Stearns (BSC). Steven Davidoff does an excellent job of pointing all this out in a New York Times DealBook piece.

For example, he asks why the New York Fed agreed to give Bear Stearns a secured lending facility on Friday, March 14, then suddenly changed its mind and backed out of the agreement by the end of the day. The SEC filing also notes that JPMorgan indicated a willingness to pay $8-$12 per share for Bear Stearns, but eventually offered only $2 per share following discussions with government officials.

Take a look at Anatomy of a Merger for more questions prompted by the SEC filing. I thank Gary Lutin for bringing Davidoff's piece to my attention.

Comments

[Tumbler]

I find it contrary to capitalism and untoward that the Fed, despite statements to the contrary essentially encouraged a no bid preference for JP Morgan when others were scrambling to organize consortiums of partners to invest in Bear Stearns and rectify what was essentially a media driven rumor mill which generated hysteria over their condition. This, in my opinion, was, and is not in the best interest of shareholders, customers, and employees of Bear Stearns. There conducting this secret and over a weekend where the principals involved were not allowed input may have, at minimum, violated SEC rules and open meeting laws.

[helplessobserver]

The final chapter of the whole BSC deal is yet to be written. JPM and us taxpayers will pony up a big settlement to Joe Lewis and the mutual funds that got killed in this deal.