[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 11 September 2007, 05:30 GMT 06:30 UK
Lewis buys 7% Bear Stearns stake
Bear Stearns headquarters in New York
Bear Stearns has been hit hard by the sub-prime crisis
Billionaire British investor Joseph Lewis has spent about $860m (424m) buying a 7% stake in struggling US investment bank Bear Stearns.

The move is seen as a major boost for Bear Stearns, which has been one of the firms most affected by the crisis in the US sub-prime mortgage sector.

Bear Stearns had to spend $1.6bn in June to bail out two of its funds exposed to sub-prime defaults.

The firm's then co-president Warren Spector resigned at the time.

Largest investor

Mr Lewis has bought the shares over the past two months through his Florida-based investment firm Tavistock, according to a filing to the US financial watchdog, the Securities and Exchange Commission.

It makes him Bear Stearns' largest individual investor.

The 16th richest British person according to this year's Sunday Times Rich List, he is worth an estimated 1.2bn.

Having made most of his fortune in the currency markets, the reclusive Mr Lewis now lives in the Bahamas.

His other investments include minority stakes in Tottenham Hotspur and Glasgow Rangers football clubs.

Record defaults

The US sub-prime mortgage sector concerns higher risk loans to people with poor credit histories or those on low incomes.

Higher mortgage rates over the past year have meant record levels of defaults in the industry.

The result has not only been significant financial difficulty for banks and investment firms heavily exposed to the sub-prime market, but also the recent stock market turmoil.

This is because of fears that the crunch in the sub-prime sector will spread to the wider loans market as banks become far more cautious about whom they lend to.

The situation has been exacerbated by the fact that sub-prime debt is often resold as part of a wider debt package, meaning that banks and investors are, as yet, unsure about how far the sub-prime downturn could spread.

As a result, banks are also holding back funds to cover any sub-prime liabilities they themselves may face.

Bear Stearns president steps down
06 Aug 07 |  Business
Bear Stearns funds face wind-down
18 Jul 07 |  Business
Bear Stearns replaces funds boss
29 Jun 07 |  Business
US bank bails out mortgage fund
22 Jun 07 |  Business
Mortgage loss threatens US banks
22 Jun 07 |  Business
Fed could lose mortgage authority
14 Jun 07 |  Business
Housing takes toll on US economy
21 May 07 |  Business

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific