Bear Stearns

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• Alan D. Schwartz
• Samuel Molinaro
• Alan C. Greenberg

The Bear Stearns Companies, Inc. (short: Bear Stearns ) was founded in 1923, a U.S. investment bank headquartered in New York. The financial institution was taken on May 30, 2008 in the wake of the U.S. banking crisis of 2008 from competitors JPMorgan Chase & Co., in order to avoid bankruptcy.

Since 1985, Bear Stearns was trading as a public company on the New York Stock Exchange and was listed on the stock index S & P 500. The balance sheet total amounted in May 2007 to 423.3 billion U.S. dollars. Due to a disease caused by the subprime crisis in 2007 liquidity crisis at Bear Stearns submitted JPMorgan Chase & Co. with support from the U.S. Federal Reserve on March 16, 2008, a tender offer, which was improved price on 24 March 2008 and on 30 May was completed in 2008.

History of the company

Bear Stearns was founded on May 1, 1923 by Joseph A. Bear, Robert B. Stearns, and Harold C. Mayer. The initial capital was $ 500,000, 7 employees were initially employed. The stock market crash of 1929 was the company well, they had to lay off any of its employees. 1933, the first branch was opened in Chicago, Bear Stearns had 75 local employees and a registered capital of 800,000 U.S. dollars. This year, Salim L. ( " Cy " ) Lewis has been set, the chairman and chief executive was later. At the same time, the business was expanded to include the trading of corporate bonds, after the company had until then dealt primarily with government bonds. In 1955 the first international office was opened in Amsterdam. Set in 1949, was Alan ( " Ace" ) C. Greenberg in 1978, chairman and chief executive, after Lewis had died. In 1985, the IPO. In 1969 James Cayne at Bear Stearns, in 1993 he became CEO in 2001 and took over the title of the Chairman. He was also a major shareholder of the bank and a professional bridge player. That it was 2007 's undoing, as he was staying for days during the hedge fund crisis at a bridge tournament. In December 2007, the company suffered the first quarterly loss in its history.

In January 2008, Cayne was forced to resign and leave the post of CEO Alan D. Schwartz.

In 1999, Bear Stearns under fire, when the company was due to their role as a clearing agent for AR Baron, a small brokerage firm that cheated their customers, sued. Bear Stearns finally paid 42 million dollars in compensation. In 1998, Bear Stearns refused the rescue of LTCM, which was caught in a massive imbalance and threatened the safety of the financial system. All other major banks agreed time on an aid package.

Business

The company was organized in the Capital Markets, Wealth Management and Global Clearing Services. Bear Stearns maintained in the U.S. offices in New York, Atlanta, Boston, Chicago, Dallas, Denver, Los Angeles and San Francisco and San Juan. International Bank was represented with offices in Dublin, Hong Kong, London, Lugano, Milan, Beijing, Sao Paulo, Shanghai, Singapore and Tokyo. In the fall of 2007, the expansion continued with the opening of offices in Paris and Frankfurt. The European activities were mainly controlled by the London branch. % Subsidiary of The Bear Stearns Company - Here about 1,000 of the more than 14,000 employees of the Bank for Bear, Stearns International Limited, a 100 worked. The London office was located in the building in Canary Wharf One Canada Square. This is the tallest building in Britain. In 2009 the new building of Bear Stearns in London should be opened, also in Canary Wharf.

Since early 2007, Bear Stearns was represented with a branch in Frankfurt am Main in Germany. Bear Stearns also sold financial products for private customers under the brand name 'best markets ' ( www.best- markets.com ). In Germany, certificates were distributed to banks and savings banks. After completing the takeover of Bear Stearns by JP Morgan JP Morgan performs these financial products continues.

Corporate crisis and takeover

Bear Stearns was already caught in the early stages of the subprime crisis in 2007 into trouble after three launched by the company hedge funds (High Grade Structured Credit Strategies Enhanced Fund, High Grade Structured Credit Strategies Fund and Asset - Backed Securities Fund ) had to file for bankruptcy. The requested in the Cayman Islands -based liquidators bankruptcy protection at the New York State Supreme Court (U.S. Bankruptcy Court ). In the latter fund suffers a loss of 4.5 million U.S. dollars was, this corresponds to a half percent of the total of 900 million U.S. dollars.

As a result, rumors about liquidity problems at Bear Stearns have been raised repeatedly in the financial markets. On 10 March 2008, Bear Stearns described in a press release such rumors as "absolutely untrue". Four days later, on 14 March 2008, Bear Stearns acknowledged a " significant deterioration in the liquidity position in the last 24 hours," a. This was caused, in the opinion of Bear Stearns, among others, also by the persistent rumors, as the credit market for Bear Stearns was de facto no longer accessible. At the same time constricted JPMorgan Chase & Co. and the U.S. Federal Reserve a bailout in the form of a bridge loan. The shares of Bear Stearns then broke a more than 47 percent.

On Sunday, March 16, 2008, JPMorgan Chase & Co. announced a takeover bid for Bear Stearns known. The acquisition price was placed at around two dollars per share, after they had closed at 30.85 U.S. dollars on Friday and even on Thursday was worth 57.00 U.S. dollars. The acquisition price corresponded to a capitalization of approximately 236 million U.S. dollars. The laced bailout looked on to suggest that the U.S. Federal Reserve virtually all risks of loss of Bear Stearns up to a total amount of 29 billion U.S. dollars takes over, while JPMorgan Chase & Co. has acquired the first billion any applicable losses.

The acquisition price was later improved to around 10 U.S. dollars per share. Simultaneously acquired JP Morgan Chase 39.5 percent of the shares in a capital increase. The proportion was extended until the end of April 2008, approximately 49 percent. For the May 29, 2008 an extraordinary general meeting in the New York headquarters was convened. The most important item on the agenda was the approval of the takeover of Bear Stearns by JP Morgan Chase. The next date of 30 May 2008, the acquisition was consummated; for one share of Bear Stearns shareholders received 0.21753 shares of the acquiring JPMorgan Chase.