Money | Bear Stearns Hedge Funds Cash In on Collapse of Bear Wagering the securities firm stock would fall paid off millions By Jim O'Neill Posted Mar 20, 2008 9:25 AM CDT Copied The headquarters for JP Morgan Chase, right, and Bear Stearns, left, are shown on Monday, March 17, 2008 in New York. (AP Photo/Mark Lennihan) The epic collapse of Bear Stearns didn't mean bad news for everyone on Wall Street—several big hedge funds made a mint off it, the Wall Street Journal reports. The funds essentially placed bets that Bear would stumble, then raked in millions when the security firm's shares took a nosedive. The SEC is investigating to make sure profiteers did not have insider knowledge of the coming collapse. Most of the profits came through a process known as short-selling, and about 25% of Bear Stearns shares were sold that way—the seventh-most of any S&P 500 issue. Some of the big winners, including Harbinger, Greenlight, and Tremblant, had as long ago as last summer began placing their bets. A Tremblant investor said the firm had no special knowledge about Bear but began looking last year for "an insurance trade in case the world got ugly." Read These Next Trump, Johnson aren't happy with pick for Super Bowl headliner. It's being called a disturbing trend: paragliders with bombs. Feds cite ChatGPT evidence in arrest of Palisades Fire suspect. Felix Baumgartner's death attributed to his own error. Report an error