Ex-Treasury Chief Paulson Says ‘Wolf Pack’ Menaced Bear Stearns
May 06, 2010, 12:42 PM EDTBy Ian Katz
May 6 (Bloomberg) -- Former Treasury Secretary Henry Paulson said bets against the survival of Bear Stearns Cos. before the firm’s sale to JPMorgan Chase & Co. amounted to “the wolf pack trying to pull down the weak deer.”
“I don’t use the word collusive because it’s got a legal connotation,” Paulson said today at a hearing of the Financial Crisis Inquiry Commission in Washington. “It sure looked to me like some kind of coordinated action.”
Paulson said he wasn’t “saying there was behavior that was illegal” and he thinks short-selling “is essential for the price-discovery process.”
JPMorgan agreed to buy Bear Stearns in March 2008, with the Federal Reserve buying illiquid Bear Stearns assets to help facilitate the transaction. Paulson, who was Treasury chief from 2006 to 2009, said Bear Stearns was planning to file for bankruptcy had a buyer not been found.
--Editors: Brendan Murray, Christopher Wellisz
To contact the reporter on this story: Ian Katz in Washington at ikatz2@bloomberg.net.
To contact the editor responsible for this story: Christopher Wellisz in Washington at cwellisz@bloomberg.net
