Bear Stearns Amends By-Laws for Expenses

In a filing with the Securities and Exchange Commission on Wednesday, Bear Stearns said the amendment allows for expenses, such as legal fees, to be paid or reimbursed by the company upon employee request.

The SEC's enforcement division has written a letter to JPMorgan Chase, which agreed to acquire Bear Stearns for $260.5 million Sunday in an emergency deal backed up by the Federal Reserve. The letter from the SEC staff discussed "investigations and potential future inquiries into conduct and statements by Bear Stearns" before the announcement of the takeover, the agency said.

The SEC mentioned the letter in a "frequently asked investor questions" release about the one-of-a-kind bailout.

In the letter, the SEC enforcement attorneys "declined to provide assurances about possible future enforcement actions" and said it would be premature to reach conclusions about their inquiry. However, they added that the staff "would favorably take into account" the circumstances surrounding the takeover when considering whether to recommend enforcement action against JPMorgan for public statements made by Bear Stearns.

Last Wednesday Bear Stearns Chief Executive Alan Schwartz appeared on CNBC to reassure investors that the firm had ample liquidity and said he was "comfortable" that it would turn a profit in its fiscal first quarter. By Thursday, Bear Stearns' solvency was being called into question and by Friday it told regulators it was ready to file for bankruptcy.