Barclays has settled claims of fraud against Bear Stearns over losses that could be up to $950m from the collapse two years ago of the first hedge fund to be hit by the financial crisis.

The failure of the Bear Stearns High Grade Structured Credit Strategies Enhanced Leverage fund and a sister hedge fund in June 2007 sent shockwaves through the financial system, foreshadowing the dangers of subprime mortgages.