CNNMoney.com- A San Francisco partnership sued Bear Stearns Cos. ( BSC) Friday over the collapse of two hedge funds earlier this year that wiped out $1.6 billion in investor capital.
FIC LP, which is described in the lawsuit as a California limited partnership, alleged that that managers of the company’s High-Grade Structured Credit Strategies Enhanced Leverage Fund engaged in fraud, willful misconduct, bad faith and gross negligence.
The Wall Street firm’s two High-Grade funds, which have filed for bankruptcy protection, imploded earlier this year as the credit markets contracted.
The complaint, which is seeking class-action status on behalf of investors in the High-Grade Structured Credit Strategies Enhanced Leverage Fund, was filed in federal court in Manhattan.
