US lawmaker probes SEC, JPMorgan contact over Bear

(Adds detail, background, efforts to seek reaction, dateline)

WASHINGTON, Oct 22 (Reuters) - A top U.S. lawmaker is probing whether a U.S. Securities and Exchange Commission official gave information to a JPMorgan Chase & Co (JPM.N) executive about SEC investigations into Bear Stearns.

Sen. Chuck Grassley, the ranking Republican on the Senate Finance Committee, wrote to SEC Chairman Christopher Cox, citing "anonymous but specific" information about what he called inappropriate contact between the SEC's enforcement director and JPMorgan's general counsel while the investment bank was mulling a bid for Bear Stearns.

The SEC "enforcement director gave information to the (General Counsel) of JPMorgan Chase (himself a former SEC enforcement director) about the state of various investigations into Bear," Grassley wrote in his letter dated Oct. 21, citing the anonymous information.

Linda Thomsen is the SEC's enforcement director, while former SEC enforcement director Stephen Cutler is general counsel at JPMorgan.

In March, the Federal Reserve backed JPMorgan's firesale purchase of ailing investment bank Bear Stearns for $2 a share, after Bear had previously traded at $30.85 per share. JPMorgan later agreed to raise the price to about $10 a share.

"This inside information, gotten through a personal relationship, would be critical in helping Morgan put together a low-ball bid to Bear and the US government," Grassley's letter continued, citing his anonymous tip. "This could have materially affected the amount of guarantees that Morgan was able to negotiate from the Federal Reserve."

An SEC spokesman declined to comment on Grassley's letter. JPMorgan did not immediately respond to a request for comment.

In March, SEC staff declined, in a publicly released letter, to assure JPMorgan that there would be no future enforcement actions regarding Bear Stearns' statements ahead of their merger announcement.

The SEC has been hammered in recent weeks by reports of improprieties in its enforcement division. The SEC's inspector general found earlier this month that an SEC regional director failed to vigorously enforce securities laws in a 2003 investigation into Bear Stearns' pricing of collateralized debt obligations.

The inspector general found in a separate report in October that the SEC should discipline Thomsen and two supervisors for their role in an insider trading probe.

And in another inspector general report in September, the internal watchdog said the SEC failed to adequately supervise Bear Stearns and limit the amount of risk it took on. (Reporting by Kim Dixon and Karey Wutkowski; Editing by Tim Dobbyn)