Bear Stearns’ largest stockholder sues auditor, former execs saying bank overvalued itself

Bear Stearns stockholder sues its former execs

NEW YORK — Bear Stearns’ largest stockholder has sued the company’s former top executives and an auditor in New York, saying they fraudulently overstated the value of the company’s stock.

Bruce Sherman, who owned 5.9 percent of the company’s shares, filed the lawsuit in federal court in Manhattan on Thursday. The lawsuit seeks unspecified damages.

Sherman accumulated his shares as chief executive officer of Private Capital Management. He says he bought shares and advised others to do the same based on the representations of the company and its auditor, Deloitte & Touche LLP.

JPMorgan Chase bought the nearly collapsed investment bank in May 2008. A JPMorgan Chase spokesman declined to comment. Deloitte said in a statement that the lawsuit lacks merit and will be fought vigorously.