Updated from 2:19 p.m. EST
Credit Suisse (CS - Get Report) Chief Executive Brady Dougan has dismissed market rumors that the Swiss bank might make a run at beleaguered investment house Bear Stearns (BSC) to senior bankers at his firm.
Dougan told Credit Suisse bankers during the World Economic Forum in Davos, Switzerland, last week that a hook-up between the Swiss giant and Bear Stearns was a non-starter, bankers attending the industry forum with the CEO tell TheStreet.com.
A spokesman at Bear declined to comment. A Credit Suisse representative in New York also declined to comment.Bear's plunging market capitalization has stirred up chatter of a takeover of the once-highly regarded fixed-income-centric firm. Indeed, last week, rumors were swirling, including reports on CNBC, that Bear might be in Credit Suisse's crosshairs. Credit Suisse has so far sidestepped much the writedowns on subprime securities that have slammed U.S. banks such as Bear, Citigroup (C - Get Report) and Merrill Lynch (MER). U.S. financial firms have racked up approximately $100 billion in writedowns on soured mortgage paper. Bear has been at the center of the subprime storm and may have very well spurred the wave of writedowns its peers are incurring when it was forced to bail out a pair of highly leveraged hedge funds. Amid this crisis, Bear and the rest of the banking industry are under intense scrutiny, and any offer for the company would have to take into account several government inquires and lawsuits directed at the firm. Numerous regulatory and government bodies, including the Securities and Exchange Commission and Federal Bureau of Investigation are checking to see if firms were involved in wrongdoing when they originated, packaged and sold mortgages and mortgage-related securities. According to media reports, the FBI is investigating some 14 firms for their role in the mess. That probe is believed to include some of the biggest originators of mortgage-tainted debt, such as Bear, Merrill, Citi, and potentially troubled home loan provider Countrywide Financial (CFC). The FBI has not publicly identified the companies it is probing. Bear has also been sued by firms such as Barclays Capital (BCS) over how the company unwound assets in its hedge funds. In addition, the New York attorney's office is investigating whether Bear selectively allowed the withdrawal of some money from its hedge funds while the assets within the fund were collapsing in value. Shares of Bear Stearns recently were down $1.99, or 2.2%, to $89.59.