BusinessWeek broke the story today that the Securities and Exchange Commission is now looking into Bear Stearns’ handling of at least one of its two troubled hedge funds:

… the Securities & Exchange Commission recently opened a preliminary inquiry into the near-collapse of Bear Stearns’ High-Grade Structured Credit Strategies Enhanced Leveraged Fund. People familiar with the inquiry say regulators are interested in learning how the Wall Street investment firm came to dramatically restate the April losses for the 10-month-old fund, which invested heavily in securities backed by subprime mortgages, or home loans to consumers with shaky credit histories.

The story contains a little bit about the blame game undoubtedly being played out behind closed doors:

Privately, Bear Stearns is spreading the word that the April restatement was prompted by actions by some of their lender banks. People familiar with the matter say the Wall Street firm claims the banks began demanding that the hedge fund put up more collateral for the loans it had taken.

Any takers on who those “lender banks” might be? I have my own theories, of course. Update: Bloomberg is reporting that the bailout being offered by Bear Stearns to save the other fund in question, the High-Grade Structured Credit Fund, has been halved to $1.6 billion after new buyers stepped up and other assets were sold off by creditors. The original rescue amount had been pegged at $3.2 billion, the largest since 1998’s bailout of Long-Term Capital Management.