Bear Stearns Gets Information Request From Hedge Fund Regulator

The firm also confirms a Justice Department probe in an SEC filing.
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Bear Stearns

(BSC)

confirmed Friday that it has received a subpoena from federal prosecutors, which seeks information about the firm's mutual fund-trading practices.

Earlier this week,

TheStreet.com

reported that James Comey, the U.S. attorney for the Southern District of New York,

had taken an active role in the investigation of Bear Stearns.

In a filing with the

Securities and Exchange Commission

, the big Wall Street firm also said it had received an "information request" from the Commodity Futures Trading Commission, a government agency that regulates futures and commodity traders. The CFTC's jurisdiction gives it some regulatory authority over hedge funds, for whom Bear Stearns clears and processes trades.

One reason regulators and prosecutors may be focusing on Bear Stearns is because the firm processed and executed trades for many of the hedge funds and small brokerage firms in the middle of the fast-expanding mutual fund-trading scandal.

Last week, Bear Stearns fired six employees from its private client group who allegedly helped some of the firm's hedge fund customers trade shares of mutual funds.

Also, a

recently filed lawsuit in Manhattan federal court alleges that Bear Stearns played a pivotal role in the trading scandal by making it easier for hedge funds and brokerages to engage in improper trading of mutual funds sold. The lawsuit contends Bear Stearns created and marketed an "electronic routing system" that made it easier for hedge funds and small brokerages to trade shares of mutual funds.

Other regulatory and government agencies that are investigating Bear Stearns include the SEC, the

New York Stock Exchange

and New York Attorney General Eliot Spitzer.