Barclays sues Bear Stearns over hedge funds

At the end of May, for example, Bear Stearns Asset Management had the Enhanced Fund buy about $500 million of the riskiest classes of securities in a deal that it managed, Barclays' complaint says.

"BSAM did so despite the fact that investment restrictions it had promised Barclays did not permit those securities to be held in the fund," the complaint added.