Billionaire currency trader Joseph C. Lewis paid $860 million to acquire a 7 percent stake in Bear Stearns (NYSE:BSC) making him the brokerage firm's largest shareholder, according to a Schedule 13D filing with the SEC. The company's shares rose more than 3 percent on the news.

Bear Stearns shares have already declined more than 30 percent this year, primarily due to the collapse of the subprime mortgage market. Two of the company's hedge funds had been trading mortgage securities and experienced a loss of approximately $1.5 billion by the time the fiasco came to a close.

Lewis is the latest in a series of insiders and investors that have been taking large stakes in banks hurt by mortgage and credit worries. In fact, insider buying in the banking industry is near an all-time high as many are extremely confident in a turnaround.

There is also speculation that the billionaire may be interested in taking the company private. Lewis did this once before in the 90s after acquiring 30 percent of Christie's International. In the end, however, it is most likely that this is a more passive investment that may involve some communication with management (as it is a 13D and not a 13G). Regardless, this is definitely a stock worth watching!

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