The FT reports that Bear Stearns is facing accusations of conflict of interest as it has now been revealed that it was a major lender to a company that it was advising a UK pharmaceutical group to purchase.
The bank seemingly provided a $225m loan facility to Medpointe, a New York based drugs company 12 months ago. It also allegedly flagged up the company as a potential purchase to another client, Shire Pharmaceuticals, and valued the business at nearly twice as much as another independent valuation.
The newspaper quotes an unnamed 'big US investor', who said: 'It's not very encouraging when there's a conflict valuation like this....Would Bear Stearns have disclosed their dual interest to shareholders'.
Bear Stearns has not as yet commented on the story.