--- alias: - Bear Stearns Companies - The Bear Stearns Companies Inc. - Bear, Stearns & Co. category: Private Organization created: 2026-09-25 end: 2008 location: New York, New York relations: - end: 1981-03-12 fn: 1 reverse: true role: options trader; limited partner from 1980 start: 1976 type: employed_by with: '[[Jeffrey Epstein]]' - end: 1993 fn: 2 reverse: true role: chief executive officer start: 1978 type: head_of with: '[[Alan Greenberg]]' - end: 2008-01 fn: 2 reverse: true role: chief executive officer start: 1993 type: head_of with: '[[James Cayne]]' - fn: 1 reverse: true role: St. Joe Minerals tender-offer inquiry start: 1981 type: investigated with: '[[Securities and Exchange Commission]]' - fn: 4 role: part owner type: owned with: '[[Liquid Funding]]' summary: New York investment bank that hired Jeffrey Epstein in 1976, parted with him in 1981 amid an SEC inquiry, handled his trades for decades, and collapsed into JPMorgan Chase in 2008. tags: - Organization - BearStearns - InvestmentBank - JeffreyEpstein - WallStreet - FinancialCrisis2008 - SEC updated: 2026-09-25 --- The Bear Stearns Companies Inc. was a New York investment bank and brokerage that employed [Jeffrey Epstein](/people/jeffrey-epstein/) from 1976 until March 1981, carried his business through his own firms for the next quarter century, and collapsed in March 2008 in a rescue sale to [JPMorgan Chase](/organizations/jpmorgan-chase/) backed by the [Federal Reserve](/organizations/federal-reserve-board/). [Alan Greenberg](/people/alan-greenberg/), chief executive from 1978 to 1993 and chairman from 1985 to 2001, and James Cayne, chief executive from 1993 to January 2008, were Epstein's mentors at the firm and his principal contacts there until its failure.[^1][^2] ### Epstein at the Firm, 1976 to 1981 Epstein, a former teacher of physics and mathematics at the Dalton School in Manhattan, came to Bear Stearns after tutoring the son of Greenberg while at Dalton, and was friendly with a daughter of Greenberg's. Under the mentorship of Greenberg and Cayne he rose to limited partner, a rank below full partner. Fox Business, citing former Bear executives, reported that he was named a limited partner by 1980.[^1][^3] He resigned on March 12, 1981, the day after the Seagram Company Ltd. announced a tender offer for St. Joe Minerals. The [Securities and Exchange Commission](/organizations/securities-and-exchange-commission/) was investigating trading in St. Joe at Bear Stearns and other firms, had been told that Epstein had information on insider trading at Bear Stearns, and took his testimony on April 1, 1981 through the staff attorneys Jonathan Harris and Robert Blackburn. Epstein told the SEC that he had found "offensive" the way management handled a disciplinary action over a possible "Reg D" violation, a loan to his closest friend; in a 1989 deposition in a Philadelphia civil case he said he had lent about 20,000 dollars to Warren Eisenstein to buy stock. By his account, the partners Michael (Mickey) Tarnopol and Alvin Einbender questioned him around March 4 and told him on March 9 that the executive committee had weighed the loan together with earlier "carelessness" over expenses and fined him 2,500 dollars; he named Marvin Davidson as the partner who had made an "issue" of it. On expenses he testified, "There was discussion whether, in fact, I had ever put in an airline ticket for someone else and not myself and I said that it was possible, ... since my secretary handles my expenses." Asked about rumors surrounding his departure, he said, "It was having to do with an illicit affair with a secretary." The SEC questioned him on whether Cayne had inside information about St. Joe, and Epstein denied knowledge of any. Bear Stearns paid him his annual bonus of about 100,000 dollars on the way out.[^1] The accounts of the exit conflict. Cayne said, "Jeffrey Epstein left Bear Stearns of his own volition. It was never suggested that he leave by any member of management, and management never looked into any improprieties by him." Greenberg said he could not recall. Contemporaries told Vanity Fair of internal rumors that the executive committee asked for his resignation after his two supporters, Greenberg and Cayne, were outvoted. A former Bear Stearns executive told Fox Business in 2019 that Epstein "left at our invitation ... it was very serious stuff." [Steven Hoffenberg](/people/steven-hoffenberg/) claimed that Epstein told him he had left after being discovered executing "illegal operations." The SEC never brought insider-trading charges against anyone at Bear Stearns in the St. Joe matter; several Italian and Swiss investors, including the financier Giuseppe Tome, who had used his relationship with Seagram owner Edgar Bronfman Sr. to learn of the offer, were found guilty.[^1][^3] ### The Continuing Relationship After 1981 Epstein claimed to manage money only for billionaires through his own firms, first [International Assets Group](/organizations/international-assets-group/) and later [J. Epstein & Co.](/organizations/j-epstein-co/), and Bear Stearns remained his broker. In a 2009 verified complaint his company [Financial Trust Company](/organizations/financial-trust-company/) stated that "Epstein has had a relationship with Bear Stearns beginning in 1976. Since 1981, Epstein has conducted hundreds of millions of dollars in transactions with Bear Stearns for his own, as well as his clients', accounts and he conducted this business with the senior management of Bear Stearns," and that "because Financial Trust was a major, long-time investor in Bear Stearns, Epstein regularly communicated directly with the most senior management." Vanity Fair listed Cayne in 2003 among Epstein's admirers.[^1][^2] From at least 2000 to 2007 Epstein was chairman of Liquid Funding Ltd., a Bermuda company partly owned by Bear Stearns that held mortgage-backed securities and collateralized loan obligations, according to files of the offshore law firm Appleby in the Paradise Papers reported by the [Miami Herald](/organizations/miami-herald/), McClatchy and the International Consortium of Investigative Journalists. A listed director of the company, the Austrian pension executive Marcus Klug, said, "There was neither a physical board meeting or a call between board members," and of Epstein, "I never met him."[^4] ### The 2007 Fund Collapse and the 2008 Failure Two Bear Stearns Asset Management hedge funds, the High-Grade Structured Credit Strategies Fund and the High-Grade Structured Credit Strategies Enhanced Leverage Fund, collapsed in June 2007 after heavy losses on securities backed largely by subprime mortgages. In June 2008 the SEC charged the portfolio managers Ralph Cioffi and Matthew Tannin with misleading investors about the funds' condition and redemption requests before investor losses of about 1.8 billion dollars; the U.S. Attorney's Office for the Eastern District of New York indicted both men the same day. Fox Business reported that Epstein had put about 60 million dollars into the Enhanced Leverage Fund, "making him one of its largest investors," and that an investor plan to take control of the fund was put to him in the summer of 2007 and "fizzled."[^3][^5] According to Financial Trust's later complaint, Epstein spoke with Cayne on August 6, 2007, while Financial Trust held 120,000 Bear Stearns shares in a Merrill Lynch account; Cayne told him the funds' problems were "contained to those two funds," cited a pending one billion dollar capital infusion from China Citic Group, and advised him to "hold tight." The complaint noted that the day after the Enhanced Fund's disintegration was announced on July 17, 2007, "Cayne and Spector commenced participating in a 10-day bridge tournament in Nashville, Tennessee." On March 10, 2008 the firm said there was "absolutely no truth to the rumors of the liquidity problems." That weekend JPMorgan Chase offered 2 dollars a share, later raised to 10 dollars, with the Federal Reserve agreeing to fund up to 30 billion dollars of Bear Stearns's less liquid assets, and Financial Trust sold its last 100,000 shares on March 17, 2008 at 3.41 dollars. Financial Trust sued Bear Stearns in the District Court of the Virgin Islands in August 2009 for fraudulent and negligent misrepresentation.[^2] ### The Grand Jury Subpoena and the Legacy Accounts The chronological log of the 2006 to 2008 federal investigation of Epstein kept by the [U.S. Attorney's Office for the Southern District of Florida](/organizations/us-attorneys-office-for-the-southern-district-of-florida/) lists a grand jury subpoena to Bear Stearns returnable September 4, 2007, issued in the same weeks as subpoenas to Epstein's assistant [Lesley Groff](/people/lesley-groff/), his bookkeeper [Harry Beller](/people/harry-beller/) and the model agent [Jean-Luc Brunel](/people/jean-luc-brunel/), and three weeks before the [non-prosecution agreement](/events/epstein-non-prosecution-agreement/) was signed on September 24, 2007.[^6] When JPMorgan Chase absorbed the firm, Epstein's brokerage accounts passed with it. JPMorgan produced 728 pages of Epstein's Bear Stearns account statements covering August 2008 through March 2014, and a May 2009 due-diligence report recorded that "Bear Stearns will hold the brokerage relationship with Mr. Epstein." Emails produced in May 2023 in the [Virgin Islands suit against JPMorgan](/events/government-of-the-united-states-virgin-islands-v-jpmorgan-chase-bank/) showed Bear Stearns employees involved in the Epstein relationship in the fall of 2008 and the summer of 2010, including one stating that Greenberg, by then at JPMorgan, had gone to general counsel [Stephen Cutler](/people/stephen-cutler/) "for an exception to the felony policy" for Epstein; JPMorgan confirmed that after Epstein's 2008 plea "people from legacy Bear Stearns, including Mr. Greenberg," may have approached Cutler about the policy requiring general counsel approval to keep a felon's brokerage account, and that the decision was Cutler's.[^7][^8] On January 19, 2011, while JPMorgan's compliance staff were pressing to exit Epstein, a JPMorgan Securities employee wrote to Epstein: "Ace would love to speak to Jeffrey. Can you please call Ace at [number], or e-mail him a phone number where Jeffrey can be reached?" JPMorgan had not produced the email, describing it as outside the "negotiated scope of search," until the territory asked for it specifically; the bank said there was "no evidence that Mr. Greenberg had anything to do with Epstein's accounts at the Private Bank."[^7][^8] In July 2011 JPMorgan proposed settling Epstein's own claims against Bear Stearns for 21 million dollars.[^9] The territory asked the court in June 2023 to compel production of the Bear Stearns anti-money-laundering group's Epstein case file, "including documents and correspondence relating to any Epstein-related subpoena received by Bear Stearns," emails between Greenberg and Epstein, and emails about Epstein between Greenberg and [Jamie Dimon](/people/jamie-dimon/), [Mary Erdoes](/people/mary-erdoes/), [Jes Staley](/people/jes-staley/) or Cutler. JPMorgan answered that "Bear Stearns did not provide banking services and ceased to exist after the transaction," that it had identified a single former Bear Stearns compliance employee as a custodian, and that the case "has never been about Epstein's trading of securities in a Bear Stearns related brokerage account."[^7][^8] JPMorgan's own July 2019 internal review, Project Jeep, had been opened with the note that "There is a highbridge angle and one dating back to Bear," and its summary grouped messages on "lawsuits and litigation involving Epstein, JPMC, Bear Stearns, Highbridge, Zwirn etc."[^7] [^1]: Vicky Ward, "The Talented Mr. Epstein," *Vanity Fair,* March 2003, as republished by the author, on Epstein's hiring through Greenberg, his limited partnership, the March 12, 1981 resignation, the April 1, 1981 SEC testimony taken by Jonathan Harris and Robert Blackburn, the 1989 Philadelphia deposition, the Tarnopol, Einbender and Davidson account, the 2,500 dollar fine, the bonus, Cayne's statement, and the St. Joe Minerals outcome. https://vickyward.com/article/the-talented-mr-epstein/ [^2]: Financial Trust Company, Inc. v. The Bear Stearns Companies Inc., Civil No. 2009/106 (D.V.I.), Verified Complaint dated August 5, 2009, paragraphs 2, 6 to 13, 16 to 17, 32 to 40, 50 to 53; reproduced as Exhibit 253, ECF No. 244-8 (filed July 25, 2023), in Government of the United States Virgin Islands v. JPMorgan Chase Bank, N.A., No. 1:22-cv-10904-JSR (S.D.N.Y.). https://web.archive.org/web/20260117011822/https://www.justice.gov/multimedia/Court%20Records/Government%20of%20the%20United%20States%20Virgin%20Islands%20v.%20JPMorgan%20Chase%20Bank,%20N.A.,%20No.%20122-cv-10904%20(S.D.N.Y.%202022)/244-08.pdf [^3]: Charles Gasparino and Lydia Moynihan, "The woes of Jeffrey Epstein: How he maintained Wall Street connections while downplaying child sex accusations," *Fox Business,* August 10, 2019. https://www.foxbusiness.com/features/jeffrey-epstein-wall-street-connections-child-sex-trafficking [^4]: Spencer Woodman, "Jeffrey Epstein's offshore fortune traced to Paradise Papers," *International Consortium of Investigative Journalists,* July 18, 2019, summarizing Miami Herald and McClatchy reporting on the Appleby files. https://www.icij.org/investigations/paradise-papers/jeffrey-epsteins-offshore-fortune-traced-to-paradise-papers/ [^5]: U.S. Securities and Exchange Commission, Litigation Release No. 20625, SEC v. Ralph R. Cioffi and Matthew M. Tannin, Civil Action No. 08 2457 (FB) (E.D.N.Y.), June 19, 2008. https://www.sec.gov/files/litigation/litreleases/2008/lr20625.htm [^6]: U.S. Department of Justice, Epstein Library, EFTA00224943, DataSet 9, "Epstein Investigation Timeline," Exhibit A-1 (U.S. Attorney's Office, Southern District of Florida), pp. 11, 21. https://www.justice.gov/epstein/files/DataSet%209/EFTA00224943.pdf [^7]: U.S. Department of Justice, Epstein Library, EFTA02808715, Court Records (Government of the United States Virgin Islands v. JPMorgan Chase Bank, N.A., No. 1:22-cv-10904), letter motion of Motley Rice to Judge Jed S. Rakoff seeking leave to reopen depositions, ECF No. 191, June 7, 2023 (filed June 20, 2023). https://www.justice.gov/epstein/files/Court%20Records/Government%20of%20the%20United%20States%20Virgin%20Islands%20v.%20JPMorgan%20Chase%20Bank%2C%20N.A.%2C%20No.%20122-cv-10904%20(S.D.N.Y.%202022)/EFTA02808715.pdf [^8]: U.S. Department of Justice, Epstein Library, EFTA02808625, Court Records (Government of the United States Virgin Islands v. JPMorgan Chase Bank, N.A., No. 1:22-cv-10904), letter of John J. Butts, WilmerHale, opposing the motion to reopen depositions, ECF No. 187, June 9, 2023 (filed June 15, 2023). https://www.justice.gov/epstein/files/Court%20Records/Government%20of%20the%20United%20States%20Virgin%20Islands%20v.%20JPMorgan%20Chase%20Bank%2C%20N.A.%2C%20No.%20122-cv-10904%20(S.D.N.Y.%202022)/EFTA02808625.pdf [^9]: Government of the United States Virgin Islands v. JPMorgan Chase Bank, N.A., No. 1:22-cv-10904-JSR (S.D.N.Y.), Plaintiff's Statement of Material Facts, ECF No. 221 (filed July 24, 2023), paras. 391-395. https://storage.courtlistener.com/recap/gov.uscourts.nysd.591653/gov.uscourts.nysd.591653.221.0.pdf