Reply #13: Bruised Bear hedge fund investors mull legal action

[UpInArms]

http://news.yahoo.com/s/nm/bearstearns_hedgefund_dc

NEW YORK (Reuters) - Some aggrieved investors are turning to lawyers to pursue possible legal claims stemming from losses at two Bear Stearns Cos. (NYSE:BSC - news) hedge funds that were virtually wiped out from large, illiquid bets on risky mortgages.

One lawyer who handles cases against financial firms said on Wednesday that he had been retained by two investors in the funds -- a family office and a fund of funds he would not identify -- to explore potential lawsuits.

"They are shocked and angered by the losses," said lawyer Ross Intelisano, of Rich & Intelisano in New York. "They were under the impression that at least for that fund (that they were invested in) that the losses were much milder."

Bear Stearns said in a letter to clients on Tuesday that there was "effectively no value" left for investors in its High-Grade Structured Credit Strategies Enhanced Leverage Fund and "very little value" remaining in the High-Grade Structured Credit Strategies Fund. A copy of the letter was obtained by Reuters.

CNBC reported on Wednesday that Bear Stearns had hired several outside law firms as it braces for investor litigation. It said the Wall Street firm had hired WilmerHale to represent it before the U.S. Securities and Exchange Commission and shareholders, another to represent the board of directors and audit committee and another to represent the funds themselves.

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