Unless you’ve been on a deserted island for the past two weeks (today is April 3, 2008), you will know of the near-collapse of the investment bank Bear Stearns.  Bear Stearns stock closed at $169.61 per share on January 12, 2007. The initial sale price to JP Morgan was $2 per share, since raised to $10, but this still represents a 94% decline from the high to the sale price. Many very wealthy investors in Bear Stearns are much less wealthy. Perhaps there isn’t a great deal of sorrow over their plight, but losses have been suffered by many people working at Bear Stearns who weren’t in the multimillionaire category, or in any case aren’t anymore.

Several lawsuits have already been filed as a result of the decline in value of Bear Stearns.  One investor has sued, alleging that the company issued false and misleading information about its financial situation.  A second was filed by a Bear Stearns employee, claiming that the company and its executives breached their fiduciary duty, causing losses to the employee stock ownership plan that is a principal shareholder of the company. A day later, another employee sued on similar grounds. Many people at Bear Stearns who had much of their retirement funds in Bear Stearns stock are facing a grim retirement picture, and it’s almost certain that more suits will be filed. Sometimes it’s a good idea to put all of your eggs in one basket, but if you drop the basket, it might be difficult to find more eggs.