OLD Media Moves

Gasparino: The right reporting was done on Bear Stearns

July 9, 2008

Charles Gasparino writes Wednesday that the reporting that he and others did on CNBC before the fall of Bear Stearns & Co. was simply reporting what was happening in the market, and not rumors that took down the company — in contrast to what Bryan Burrough wrote in Vanity Fair.

Charles GasparinoGasparino writes, “The popular notion is that a combination of rumor-mongering short sellers and chit-chatting reporters somehow banded together to raise enough issues with Bear that by Thursday of that week — a day after Bear CEO Alan Schwartz told us on-air the firm was OK and two days after the CFO told me the firm was fine — a run on the bank had begun.

“So I went back and did some reporting on the week’s events. At the time I reported that a run on the bank was a possibility. I knew hedge funds that were clients of Bear’s prime brokerage division were thinking about pulling money out. On Tuesday March 11, I reported as much saying that Bear was worried about a run on the bank.

“But according to two hedge fund managers, the run-on-the bank was beginning or had begun much earlier. Now these were NOT short sellers. These were supporters of Bear Stearns. They were prime brokerage customers with deposits inside Bear and were until then lending the firm money.”

Read more here.

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