Bear Stearns ( BSC) said Sunday that Co-President and Co-Chief Operating Officer Warren Spector has resigned following the meltdown of two of its hedge funds.

As part of a management overhaul, Alan Schwartz, who had been sharing duties with Spector, will become the company's sole president. Chief Financial Officer Sam Molinaro will assume the additional title of chief operating officer, Bear said.

In addition, Jeffrey Mayer, co-head of the fixed income division, was named to the Wall Street bank's executive committee.

Spector, who also resigned as a Bear board member, had overseen the asset management division that housed the two hedge funds that fell apart earlier this summer after making big bets on the subprime mortgage market.

"In light of the recent events concerning BSAM's (Bear Stearns Asset Management's) High Grade and Enhanced Leverage funds, we have determined to make changes in our leadership structure," said Chairman and CEO James Cayne in a statement. "These promotions reflect and acknowledge the depth of talent in our senior management team."

On Friday, Standard & Poor's cut the outlook on Bear's credit rating to negative from stable. The bank held a conference call to address the cut, during which Molinaro told listeners that the credit market is about as bad as he has seen it in two decades. That sent Bear shares sliding 6% on the day, and contributed to a broader selloff in the market.

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