Joseph Lewis Loses 800 Million Dollars in Bear Stearns Crash

British billionaire Joseph Lewis made his fortune gambling on currencies. His recent investment in Bear Stearns Cos. has turned out to be a disastrous bet.

The elusive septuagenarian is one the biggest losers from the New York investment bank’s problems. In just a few months, he has paper losses of about $800 million on his roughly 9.6% stake in Bear, whose share price has cratered in recent days.

A small cadre of investors, often considered some of the best in the business, own big stakes in Bear that aren’t looking good. A number of these shareholders are the type of investors who ordinarily would take a hard line in a sale, demanding a higher price. But with Bear on the brink, they may have little choice.

Among the stakeholders: James Barrow, a Dallas money manager who runs the firm Barrow, Hanley, Mewhinney & Strauss Inc., is the single biggest investor, with a 9.95% stake, according to recent regulatory filings. Bear Stearns Chairman James Cayne, who stepped down as chief executive in January amid criticisms by some investors that he was too hands-off when the mortgage mess unfolded, holds a stake just under 5%. So does activist investor Bruce Sherman, the CEO of Naples, Fla., money-manager Private Capital Management Inc., a unit of Legg Mason Inc., recent regulatory filings show…

Friday, Bear’s shares fell 47% to a nine-year low of $30 in New York Stock Exchange composite trading after the Federal Reserve and J.P. Morgan Chase & Co. stepped in to keep the firm afloat following a severe cash crunch. It doesn’t appear from reviews of regulatory filings that Messrs. Sherman, Cayne, Barrow and Lewis have sold shares in recent weeks.

The son of a cafe owner in London’s East End, Mr. Lewis started work there and later expanded the family business to create a small empire of theme restaurants. He acquired the nickname “the boxer” in part because his name is similar to boxing legend Joe Louis and also because of his shrewd approach to business…

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