Bear Stearns Says the Worst Will Be Over End of Fourth Quarter

Sam Molinaro, Bear Stearns chief financial officer, expects to write down 1.2 billion dollars in assets linked to mortgages in the fourth quarter of this year, but expects the worst of the bank’s writedowns are over.

This announcement at a banking conference today helped improve Bear Stearns shares & helped push up the overall stock market. Bear Stearns is now positioned to profit if subprime mortgage bonds weaken further, but still has 884 million dollars worth of exposure to collateralized debt obligations. Molinaro also said today “This has been an incredibly challenging period.”

Meanwhile, an administrative complaint was filed by Massachusetts’ Secretary of the Commonwealth, William Galvin. The complaint states that Bear Stearns had conflicts of interest involving its various affiliated entities that lead to improper trading at the High-Grade Structured Credit Strategies Fund and the High-Grad Structured Enhanced Leverage Fund.

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