SEC faults itself in Bear debacle

The Securities and Exchange Commission failed in oversight of Bear Stearns Cos. because the regulator knew the investment bank had “high leverage” and was too concentrated in mortgage securities before its forced sale to JPMorgan Chase & Co., the agency’s inspector general said.

“It is undisputable that” the SEC “failed to carry out its oversight of Bear Stearns,” Inspector General David Kotz said in a report. SEC staff was aware of “numerous, potential red flags” but “did not take actions to limit these risk factors,” he said.