Justice Department Joins Bear Stearns Probe

Federal prosecutors in New York are taking an active role in an investigation into allegations of improper mutual fund trades handled by Bear Stearns(BSC Quote), according to sources and securities regulatory filings.

People familiar with the investigation said U.S. Attorney James Comey has assigned a senior prosecutor in the securities fraud division to oversee the inquiry, which appears to be in its early stages.

The Securities and Exchange Commission and the New York Stock Exchange also are investigating Bear Stearns. New York Attorney General Eliot Spitzer, whose office served a subpoena on Bear Stearns several months ago, is taking a back seat in the inquiry and deferring to the federal prosecutors, sources said. ...