"I worked at Bear Stearns from 2005 in their healthcare investment banking group," Andrew (not his real name) says. "I worked until the middle of 2007 and left just before it started to get bad. A lot of compensation was paid in stock and I got a deal where, when I left, my stock was converted directly to Bear Stearns stock. [Andrew later explained that as employees moved up in Bear Stearns, a higher proportion of their year-end bonus was given in company stock. More senior employees received more bonuses in the form of stocks. When he left, Andrew was at the vice president level with the company, so he received a fair amount of his bonus in the form of stocks.] I could have cashed my stock out at any point, but the stock had fallen a bit, so I decided to hold on for a while.
"I always thought Bear Stearns was a relatively safe investment. I kept most of my pay in stock even though I was now at another firm because I thought the stocks would come back. Before I knew it, my stocks were pretty much wiped out.
"I lost about $100,000. When the stocks went down to $4 I did sell, but then I felt stupid because the sale [to J.P. Morgan & Chase] included an offer of $10 a share. The average price I got my stocks at was $100 a share.
"I am absolutely interested in a lawsuit against Bear Stearns. I am also interested in a lawsuit against Allan Schwartz [CEO of Bear Stearns]. When he said, "Everything is fine," I believed him. At that time my stock was worth $60 a share and I was very nervous and tempted to sell. Had he not said that everything was fine I would have sold at the time. I would have lost money but not nearly as much as I actually lost.
"Some shareholders who were responsible should suffer, but a lot of use didn't know what was going on. We relied on the advice of investment people and thought that it was safe as opposed to speculative stuff. A lot of shareholders that got burnt didn't deserve to lose their entire retirement savings."
Current and former employees of Bear Stearns who held shares in the company's Employee Stock Ownership Plan are now investigating the possibility of a lawsuit against Bear Stearns, alleging company shares were sold at too low a price when the company was sold to J.P. Morgan Chase & Co.