The revisionist history about what caused the collapse of Bear Stearns and other financial stocks continues apace. In addition to the SEC's emergency attack on naked shortselling (shorts are scapegoated in every market downturn), the propaganda campaign by former Bear Stearns execs appears to be persuading more and more people that Bear was killed by an organized hit job.

Specifically, Lehman (LEH) CEO Dick Fuld and former Bear Stearns CEO Alan Schwartz continue to point fingers at Goldman Sachs and other trading firms for spreading false rumors that caused trading partners to flee. Both execs have reportedly confronted Goldman CEO Lloyd Blankfein about this allegation, the WSJ says. Blankfein says through a spokesman that he doesn't recall the Schwartz conversation.

Meanwhile, the SEC has subpoenaed several hedge funds for their trading and communications records:

The SEC investigation into Bear's collapse partly involves trading documents, which have been reviewed by The Wall Street Journal. The documents indicate that in the weeks before March 16, when Bear Stearns reached its initial agreement to sell itself to J.P. Morgan, Goldman Sachs International, which encompasses the firm's European trading units, was one of the most-active parties in trading securities known as credit default swaps that it had bought from or sold to Bear Stearns -- more than most other Bear trading partners.

Goldman cut much of its exposure to Bear just before the collapse. Goldman denies wrongdoing and insists that the nature of its trading business is complex--which it certaily is.

An SEC dragnet will undoubtedly unearth some scandalous emails and IMs. Until we see irrefutable evidence to the contrary, however, we will continue to believe that the rumors that hit Lehman and Bear were Wall Street business as usual. Good firms are built to survive such rumors, and Bear and Lehman weren't. In our opinion, Fuld and Schwartz have no one to blame but themselves. They took too much risk, and destroyed their own credibility. And now they're paying for it.

See Also: Lehman's Odds Of Survival Now Almost As Bad As Bear Stearns

Bear Stears Was Not An Act Of God